US court orders Ripple to release historical financial documents, accepting SEC request
Posted: February 6, 2024 2:14 AM Updated: February 6, 2024 2:14 AM
Correction and fact check date: February 6, 2024, 2:14 AM
briefly
A US judge has ordered Ripple to provide details about the company’s financials and institutional sales of its XRP tokens, marking a victory for the SEC.
A U.S. district judge has ordered technology company Ripple (XRP) to provide supplementary details regarding the company’s financials and institutional sales of the XRP digital asset. This decision represents a victory for the Securities and Exchange Commission (SEC).
The court granted the SEC’s request to compel Ripple to provide additional information to help the court determine the appropriate penalty. The stipulated requirements include the filing of financial statements for 2022-2023 along with an agreement to oversee XRP institutional sales. Additionally, Ripple is obligated to address inquiries regarding the size of proceeds from institutional sales of XRP.
In response to the SEC’s request, Ripple argued that the company’s financial well-being had nothing to do with the matter. Nonetheless, the court found that there was no justification for accelerating the investigation by withholding access to readily available information that could be relevant to the redress phase.
The judge also agreed with the SEC, acknowledging the relevance of details regarding XRP’s post-suit institutional sales when assessing the necessity and fairness of an injunction.
SEC targets Ripple with XRP sales
The SEC took legal action against Ripple and its executives in 2020, alleging that the company raised $1.3 billion in 2020 through XRP sales. The company also filed a lawsuit against CEO Brad Garlinghouse and co-founder Christian Larsen.
Last year, Judge Analisa Torres of the Southern District of New York ruled that XRP sales to institutional investors were considered illegal securities sales, while “blind bid” sales to retail investors were not.
Although the judge acknowledged that the $728 million contract for institutional sales was considered a sale of unregistered securities, investors and Ripple Labs perceived the partial ruling as a positive outcome for the broader cryptocurrency sector. Afterwards, Ripple dismissed all charges against its executives, a notable development in the ongoing legal proceedings.
At the recent World Economic Forum in Davos, Ripple CEO Brad Garlinghouse criticized the SEC for being “hostile” to the industry. He also expressed his opinion that current SEC Chairman Gary Gensler is perceived as a “political liability” and claimed that Gensler’s regulatory approach within the cryptocurrency sector is ineffective.
Ongoing legal developments surrounding the Ripple case, including recent court decisions favoring the SEC and Ripple’s subsequent obligations, highlight the complexity of the interplay between regulatory scrutiny, judicial interpretation, and industry response, and highlight the need for regulatory clarity in the cryptocurrency sector. This is further emphasized.
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About the author
Alisa is a reporter for Metaverse Post. She focuses on everything related to investing, AI, metaverse, and Web3. Alisa holds a degree in Art Business and her expertise lies in the fields of art and technology. She developed a passion for journalism through her work with VCs, notable cryptocurrency projects, and science writing. You can contact us at (email protected).
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alice davidson
Alisa is a reporter for Metaverse Post. She focuses on everything related to investing, AI, metaverse, and Web3. Alisa holds a degree in Art Business and her expertise lies in the fields of art and technology. She developed a passion for journalism through her work with VCs, notable cryptocurrency projects, and science writing. You can contact us at (email protected).
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