SEC Files New Motion Seeking Ripple’s Financial And Sales Records

The US Securities and Exchange Commission (SEC) has taken another worrisome step in its legal battle with Ripple Labs.In line with the proceeding of the SEC vs. Ripple case, the securities regulator has filed a reply supporting its motion to compel.

The SEC released the letter on January 23 as its brief reply.

SEC Files Brief Reply to Support its Motion Over Ripple

SEC demanded that Ripple should produce its audited financial statements for two years, between 2022 and 2023. Moreover, the expects the blockchain firm to release its post-complaint contracts regarding institutional sales.

Also, the regulator demands a response from Ripple on an interrogatory regarding its earnings from institutional sales of XRP.However, the proceeds details will cover from December 2020, when the SEC filed the complaint.

A prominent attorney, James Filan, took to the X platform to relate the progress of the case.

#XRPCommunity #SECGov v. #Ripple #XRP The SEC has filed its Reply in Further Support of its Motion to Compel.https://t.co/XsJkh6H6g8

- James K. Filan (@FilanLaw) January 24, 2024

According to the post, the SEC cited some reasons for the court to grant its motion to compel against Ripple in its letter. Notably, the blockchain company had opposed its previous demand.

According to the regulator, Ripple's argument on time constraint is spurious."

The SEC countered the notion supporting the irrelevance of post-complaint facts in deciding the remedies litigation. The SEC mentioned that courts usually apply post-complaints facts when resolving matters related to violation of securities laws.

Again, the regulator pointed out some counter-actions the commission could take if the court approves Ripple's withholding of post-complaint contracts.It mentioned that the commission would also fail to provide relevant evidence in the remedies' litigation.

Part of the letter read:

Judge Torres is permitted to consider the full deterrent effect of any penalty and whether to send as strong a message as possible to the investment community' that securities violations will not go unpunished.

The Remedies Phase Of The SEC Vs. Ripple Case

Currently, the SEC vs. Ripple case is in the remedies-based discovery stage. The court has set the conclusion on February 12, 2024. According to the legal schedule, a filing phase is to commence from March 13 to April 29.

Also, the two parties would move on and file their remedies-related briefs.

During the next stage, the parties would debate for and against a corrective measure of penalty for the defendant.The entire argument focuses on Ripple's potential violation of the securities laws via its institutional sales of XRP.

The amount of institutional sales on debate hovers around $770 million. There's the possibility of a declaration that will mandate Ripple to pay a fine worth the amount.

Before now, some prominent legal experts such as Attorney John Deaton thought the fine against the firm could be lower than $200 million.

However, another prominent XRP YouTuber, Zach Rector, cited different conditions in the lawsuit. He projected that Ripple could pay over $3 billion as a fine if the SEC wins the case.

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