The SEC vs. Ripple lawsuit has now entered its next phase. In the filing addressed to Judge Sarah Netburn, the regulator has responded to the latter’s opposition to a motion seeking audited financial statements and institutional sales contracts for post-complaint transactions. The SEC first began by dismantling Ripple’s arguments, emphasizing the procedural legitimacy of its discovery requests and the relevance of the information sought.
It rejects Ripple’s claim that the motion is untimely, asserting that remedies-related discovery has been studied since the early stages, refuting the blockchain firm’s insistence on surprise. Next, the SEC challenged the company’s attempt to downplay the relevance of its financial condition, citing precedent in which a defendant’s wealth is considered in penalty calculations. The regulator has disclosed plans to provide the court with vital information to determine appropriate penalties and send a strong message to the investment community.
The latest filing comes after the blockchain-based payments firm submitted its response opposing the U.S. SEC motion to compel post-complaint discovery. As per the filing dated January 11, the regulator sought Ripple to produce audited financial statements for 2022 and 2023, disclose post-complaint contracts for XRP sales, and answer an interrogatory regarding “XRP Institutional Sales Proceeds” after the initial complaint.
SEC Vs Ripple: The Road Ahead
Ripple’s reluctance to provide post-complaint institutional sales contracts is met with skepticism. The SEC argues that these contracts are crucial evidence for assessing the firm’s future conduct, especially in light of its intention to oppose an injunction based on planned XRP sales. The SEC asserts its right to present evidence relevant to deterrence, considering Ripple’s recent financial condition and post-complaint contracts.
Furthermore, the SEC scrutinizes the blockchain payment’s objections, pointing out the inconsistency in the latter’s position regarding the relevance of post-complaint conduct. The regulator refutes the firm’s argument that seeking additional information is an attempt to bypass prior court decisions, asserting its right to consider post-complaint facts when determining remedies.
As the legal battle between the SEC and Ripple intensifies, the focus remains on the upcoming discovery phase and the court’s determination of the relevance and admissibility of the sought-after information. The SEC maintains its stance, seeking to uncover Ripple’s financial intricacies and post-complaint transactions to ensure a comprehensive and fair assessment of penalties and remedies.