Ripple Labs, the blockchain-based payments firm, has submitted its response opposing the U.S. Securities and Exchange Commission’s (SEC) motion to compel post-complaint discovery. The SEC’s motion, filed on January 11, 2024, seeks to compel 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’s Motion & Ripple’s Opposition
First, Ripple argues that the SEC’s requests are untimely, emphasizing that the SEC had ample opportunities for the sought-after discovery during the initial fact discovery period. The document notes that the SEC previously asserted that post-complaint conduct was irrelevant, a stance it now appears to be reversing.
Second, the company contends that the SEC has not justified the merits of its requests. Ripple argues that the information sought by the SEC is irrelevant to the court’s determination of remedies and that the SEC is attempting to expedite the process by pursuing a summary determination. The company asserts that such an approach would undermine the judicial process and potentially deprive Ripple of procedural protections.
The response further delves into the procedural background of the case, highlighting the conclusion of fact discovery on August 31, 2021. It details the court’s ruling on cross-motions for summary judgment on July 13, 2023, where the court determined that certain XRP sales should have been registered under the Securities Act of 1933. The parties subsequently agreed to a 90-day expert discovery period for remedies, leading to a court-ordered completion date of February 12, 2024.
Ripple argues that the SEC’s current requests exceed the boundaries of the agreed-upon discovery period and fail to demonstrate good cause for their untimeliness. Additionally, the company challenges the relevance of the SEC’s requested information, emphasizing that audited financial statements and post-complaint sales contracts are not pertinent to the court’s determination of penalties or remedies.
Nevertheless, the legal battle between Ripple and the SEC continues, with both parties presenting their arguments and counterarguments as they navigate the complexities of cryptocurrency regulations and securities laws.
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