TL;DR
- Ripple Ordered to Reveal Financial Data: A U.S. District Court has ordered Ripple to reveal its financial statements from 2022-2023.
- Court Orders Ripple to Produce Contracts: The court has ordered Ripple to produce “post-complaint contracts governing ‘institutional sales’” and to answer an interrogatory.
- Implications for Ripple and the Crypto Industry: This ruling is another win for the SEC in its years-long legal battle with Ripple.
In the ongoing legal conflict between Ripple and the U.S. SEC, a U.S. District Court has ordered Ripple to reveal its financial statements from 2022-2023. The court ruling, signed by United States Magistrate Judge Sarah Netburn, stated that there was no basis to deny access to readily available information that may be probative to the remedy stage.
The SEC’s complaint, originally filed in December 2020, alleges that Ripple raised $1.3 billion through XRP sales, which the federal agency claims are unregistered securities. In a filing dated January 19, Ripple expressed its opposition to the SEC’s request.
The company argued that the regulator’s request was not timely and lacked sufficient justification for each of its demands. Now, however, the court has ordered Ripple to produce “post-complaint contracts governing institutional sales”.
Implications of the Court’s Decision on Ripple and the Crypto Industry
The decision follows the SEC’s main argument. They argue that the District Judge must evaluate Ripple’s behavior before the complaint to ascertain the necessity of an injunction. Ripple had previously pushed back against this motion, alleging that its post-complaint conduct has been structured to comply with the court’s rulings. However, the court filing read, “The SEC should be permitted to rebut that statement”.
Apart from the financial statements, Ripple will have to “answer an interrogatory regarding the amount of XRP Institutional Sales proceeds it received”, according to the complaint on file. Furthermore, the court’s decision stated, “Because the SEC has made a sufficient showing that this information may assist the Court in fashioning its remedy, Ripple must respond to the interrogatory”.
This ruling represents another win for the SEC in its years-long legal battle with Ripple. Before this recent judicial decision, the SEC had resolved to conclude its federal securities law lawsuit against Ripple’s CEO, Brad Garlinghouse, and its Executive Chairman, Chris Larsen, in October 2023.
Garlinghouse has mentioned before that, “For nearly three years, Chris and I have been the subject of baseless allegations from a rogue regulator with a political agenda”. As the case continues, the cryptocurrency industry watches closely, awaiting the implications this could have on the future of digital assets and their regulation.
