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SEC vs Ripple: Lawyers Declare Request for Financial Statements as ‘Irrelevant’

2 mins
Updated by Bary Rahma
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In Brief

  • Ripple's legal team rejected the SEC's request for additional financial documents, deeming it untimely and unjustifiable.
  • The crypto company contends that the request is irrelevant and burdensome, emphasizing a previous discoveries.
  • Ripple Labs also expressed concerns that the latest development could lead to potential delays of the proceedings.
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Ripple’s legal team has rebuffed the US Securities and Exchange Commission’s (SEC) request for additional financial documents.

On January 19, the defense counsel rejected the SEC’s request, deeming it untimely and unjustifiable.

Ripple Challenges SEC Demands

The SEC had requested Ripple’s audited financial statements for 2022 and 2023, along with post-compliant contracts related to the sale or transfer of XRP to non-employee counterparties. Additionally, the regulator asked for information on the amount of XRP Institutional Sales proceeds received from specific complaint contracts.

However, Ripple contended that the SEC’s request is “irrelevant,” emphasizing that both parties had previously agreed that post-compliant discoveries were unnecessary. Furthermore, the firm argued that the SEC failed to justify each request sufficiently.

Expressing concern about potential delays, Ripple believes that reevaluating whether its post-compliant conduct violated the law could prolong the proceedings, necessitating an intensive and prolonged fact-discovery period. Lawyers also raised apprehensions about the SEC’s summary procedure potentially depriving it of standard pre-suit investigation protections.

In addition, Ripple’s counsel contended that the regulatory body cannot unilaterally extend its interrogatories in the case. Consequently, Ripple called for denying the SEC’s request, labeling it “burdensome,” particularly with the deadline having elapsed.

“The SEC’s request for irrelevant and burdensome post-complaint discovery, especially given the close of fact discovery, should be denied,” the lawyers wrote.

This latest development occurs within the backdrop of the ongoing legal dispute between Ripple and the SEC. Although Ripple secured a landmark victory last year that established its XRP token sales to the public was not a security, the company anticipates potential challenges ahead. Notably, the trial between the parties is slated to commence in April, adding to the situation’s complexities.

Read more: Ripple (XRP) Price Prediction 2024/2025/2030

XRP Price Performance
XRP Price Performance. Source: TradingView

Meanwhile, the XRP token experienced minimal impact despite trading predominantly in negative territory over the past week. The digital asset witnessed a 5% decline during this timeframe, reaching a low of $0.526. However, it has subsequently rebounded to $0.5484.

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Oluwapelumi Adejumo
Oluwapelumi believes Bitcoin and blockchain technology have the potential to change the world for the better. He is an avid reader and began writing about crypto in 2020.