Ripple Labs Inc. Challenges SEC’s Demand in a Lawsuit

SEC signboard with a banner and icon of justice beside Ripple Lab's banner

Ripple Labs Inc. files a sur-reply motion to counter the SEC’s claims in the XRP lawsuit. The motion addresses the inaccuracies presented by the SEC and adds more intensity to the heated case.

Demands Ripple’s 2022-2023 Audited Financial Statements

Ripple Labs Inc., the company behind the XRP token, has filed a motion to submit a sur-reply in its lawsuit with the U.S. Securities and Exchange Commission (SEC). The motion aims to correct what Ripple calls “significant factual mischaracterizations” by the SEC.

The motion, filed before Judge Sarah Netburn of the Southern District of New York, adds more intensity to the already heated case. SEC demands Ripple’s financial data and XRP sales info, The SEC accuses Ripple of selling $1.3 billion worth of unregistered securities through its XRP token.

The SEC wants Ripple to provide audited financial statements for 2022-2023, as well as documents related to the sale or transfer of XRP to non-employees. The SEC is also interested in the proceeds Ripple received from institutional XRP sales after the lawsuit began.

Ripple Objects with Sur-Reply Motion

Ripple objected to these requests, saying they were too burdensome. The SEC rejected these objections, saying they were baseless and inaccurate.This dispute over document production and its burden on Ripple is a key issue in the case.

To counter the SEC’s claims and the overall narrative of the lawsuit, Ripple’s lawyers have filed a sur-reply motion. This motion seeks to clarify the inaccuracies that the SEC presented in its recent submissions. One point of contention in the sur-reply is the SEC’s depiction of Ripple’s refusal to produce post-complaint contracts.

A Burdensome and Unjustifiable Request

Ripple argues that it objected to the SEC’s request as “overly burdensome,” which contradicts the SEC’s story. The filing of this sur-reply motion is a crucial moment in the ongoing legal battle between Ripple Labs Inc. and the SEC.

“The SEC seeks to compel Ripple to: (i) produce audited financial statements for the years 2022 and 2023; (ii) produce all post-complaint contracts for the sale or transfer of XRP to ‘non-employee counterparties’; and (iii) answer an interrogatory about the amount of ‘XRP Institutional Sales proceeds’ received after the filing of the Complaint for certain contracts. Ripple opposes these requests for two main reasons. First, they are untimely… Second, the SEC has failed to justify each of its requests on the merits. They are irrelevant: the information the SEC seeks has no bearing on the Court’s remedies determination,” the letter said.

SEC’s Determination to Ensure Compliance

As the parties clash over the scope and burden of document production, the case becomes more complex.

The outcome of this lawsuit will have major implications for Ripple and the cryptocurrency industry. Even though the court has determined that XRP is not a security, the SEC seemed determined to ensure that Ripple Labs complies with regulations that govern its operations.

The answer could affect how XRP is regulated and traded in the U.S.As the legal fight continues, market watchers and players follow the developments closely. The case could set a precedent for how the SEC regulates cryptocurrencies and how crypto companies operate in the U.S.

Author: Dominion

Domie loves writing and building cool stuffs.