Untimely and irrelevant: Ripple challenges SEC request for financials

Ripple Labs’ lawyers argue that the United States Securities and Exchange Commission’s request for disclosure of financial documents is irrelevant.
Ciaran Lyons
Posted by Ciaran Lyons January 20, 2024 2 Mins Read
Ripple Labs’ lawyers argue that the United States Securities and Exchange Commission’s request for disclosure of financial documents is irrelevant.

Lawyers representing Ripple Labs have argued that the United States Securities and Exchange Commission’s (SEC) request to examine additional financial documents is invalid. They argued that the deadline has passed and the material isn’t relevant to the upcoming trial in April.

In a court filing on Jan. 19, Ripple’s legal team claimed the SEC had changed its stance on collecting additional information during the discovery phase, which requires each party to share relevant documents with the other as part of the legal process.

On Jan. 11, the SEC demanded that Ripple produce audited financial statements for the financial years 2022 and 2023, disclose all contracts related to the sale or transfer of XRP (XRP) to external entities made after the initial filing, and provide additional details on the institutional sale proceeds from XRP.

However, the deadline for requesting material during the fact discovery phase concluded in August 2021. Ripple argued that the SEC had “ample opportunity” to demand what material it deemed necessary.

“In fact, the parties already have litigated whether post-complaint discovery was proper and in the course of that discovery dispute, the SEC never argued that post-complaint discovery was relevant to remedies but instead took the position that post-complaint conduct was entirely irrelevant to the case.”

Meanwhile, Ripple’s legal team stressed that the court should not be swayed by the U.S. regulator’s portrayal of the blockchain payments technology company.

“The Court should not go down the slippery slope the SEC is paving,” the lawyers stated.

Furthermore, Ripple’s lawyers contended that the SEC used up all of its interrogatories, which are a list of written questions that the SEC could put forth to Ripple to answer before trial. 

“And lastly, as to the SEC’s interrogatory in particular, the SEC has used all of its interrogatories in the case and cannot unilaterally grant itself more,” the filing states.

Related: Ripple’s legal chief unveils SEC’s XRP settlement offer before 2020 lawsuit

The trial between Ripple and the SEC is set to commence in April. The regulator initially filed charges against Ripple in December 2020, accusing the company of raising funds through the sale of unregistered securities through XRP.

However, Ripple secured a partial victory against the SEC in July 2023, with the judge ruling that the XRP token is not a security when it comes to programmatic sales on crypto exchanges.

Cointelegraph recently reported that Ripple’s chief legal officer, Stuart Alderoty, referred to the SEC as an “out of control regulator” due to its position on crypto.

Magazine: Crypto Banter’s Ran Neuner says Ripple is ‘despicable,’ tips hat to ZachXBT: Hall of Flame

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