25 February, 2024

Ripple Fights Back Against SEC in Legal Battle, Questions SEC’s Misstatement

1 month ago

01 Feb, 2024

  • Ripple challenges the SEC’s request for financial statements and contracts, citing misrepresentations.
  • Dispute includes the scope of SEC’s discovery, extending to XRP grants and donations.
  • Court’s ruling to determine Ripple’s obligation to produce post-complaint contracts and financials.

James K. Filan, a notable figure in crypto, recently disclosed that Ripple has taken a decisive step against the SEC’s claims. To challenge the SEC’s demand for specific financial records and contracts, the fintech firm has requested to present a sur-reply.

On January 23, the SEC filed a reply to bolster its motion, demanding Ripple to provide its audited financial statements for 2022 to 2023 and contracts related to institutional sales of XRP after the initial complaint. The regulatory body has accused Ripple of presenting false arguments, asserting that the requested documents are crucial to present facts in the remedies phase of the litigation.

In a swift reaction, Ripple requested Magistrate Sarah Netburn’s permission to file a sur-reply. Accompanying this motion, Ripple included the sur-reply, indicating its readiness to challenge the SEC’s claims. The primary focus of this sur-reply is to address what Ripple terms as “major fact misrepresentations” by the SEC in its latest filing.

Moreover, Ripple refuted the SEC’s assertion that it had not specified the burden of producing post-complaint contracts. Furthermore, the company denied the SEC’s claim that it had already produced all XRP sales contracts from 2020 to 2023 in the Zakinov class action lawsuit, clarifying that no contracts post-dating December 22, 2020, were produced in that context.

The dispute also extends to the scope of the SEC’s discovery request. Ripple’s argument goes beyond institutional XRP sales to include other distribution forms, such as grants and donations. This is significant as these transactions relate to distributions the court previously ruled as non-investment contracts. As of the latest update, XRP’s value is quoted at $0.5037, showcasing a 6.05% drop in the last 24 hours.

Ripple urged the court to disregard the SEC’s alleged misstatements, which were raised for the first time in their reply. The decision now rests with Magistrate Netburn, who will determine whether to accept Ripple’s sur-reply and subsequently rule in favor of Ripple or the SEC.

Should the court rule support the SEC, Ripple must present the contracts and financial statements for 2022 and 2023. On the other hand, if the decision favors Ripple, the company will not be obligated to comply with this demand.