US Court Orders Ripple to Disclose Historical Financial Documents Accepting SEC’s Request
US court ordered Ripple to provide details regarding the company’s financials and institutional sales of XRP token, marking a win for the SEC.
United States district judge ordered the technology company Ripple (XRP) to provide supplementary details regarding the company’s financials and institutional sales of its XRP digital asset. This decision marks a win for the Securities and Exchange Commission (SEC).
The court has approved the SEC’s request to compel Ripple to produce additional information, aiming to aid the court in determining suitable penalties. The stipulated requirements include submitting financial statements for 2022-2023, along with contracts overseeing institutional sales of XRP. Additionally, Ripple is mandated to address inquiries regarding the extent of proceeds derived from institutional sales of XRP.
In response to the SEC’s motion, Ripple contended that the company’s financial well-being is unrelated to the issue. Nevertheless, the court determined that there is no justification to accelerate the investigation by withholding access to readily available information that could be pertinent to the remedy stage.
The judge also agreed with the SEC, acknowledging the relevance of details regarding post-complaint institutional sales of XRP in assessing the necessity and fairness of an injunction.
SEC Targets Ripple for XRP Sales
The SEC initiated legal action against Ripple and its executives in 2020, alleging that the company raised $1.3 billion in 2020 through the sale of XRP. Additionally, the agency filed lawsuits against CEO Brad Garlinghouse and co-founder Christian Larsen.
Last year, Judge Analisa Torres of the Southern District Court of New York ruled that sales of XRP to institutional investors were deemed illicit securities sales, while “blind bid” sales to retail investors were not.
Although the judge acknowledged that $728 million worth of contracts for institutional sales were considered unregistered securities sales, investors and Ripple Labs perceived the partial ruling as a positive outcome for the wider cryptocurrency sector. Subsequently, Ripple marked the dismissal of all charges against its executives as a notable development in the continuing legal proceedings.
Recently, in a speech at the World Economic Forum in Davos, Ripple CEO Brad Garlinghouse criticized the SEC, characterizing it as “hostile” to the industry. Additionally, he expressed his opinion that the present SEC Chair, Gary Gensler, was perceived as a “political liability” and asserted that Gensler’s regulatory approach within the cryptocurrency sector is deemed ineffective.
The ongoing legal developments surrounding Ripple’s case, including the recent court decision favoring the SEC and Ripple’s subsequent obligations, emphasize the complexity of the interplay between regulatory scrutiny, judicial interpretation, and industry response, further highlighting the need for regulatory clarity in the cryptocurrency sector.
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