“Ripple is Wrong”: SEC Rejects Ripple’s “Baseless” Claims

The SEC have rejected Ripple’s objections to financial data demands, calling them “baseless” and crucial for penalties and future compliance.

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  • The SEC has intensified its battle with Ripple, labeling their objections “baseless.”
  • The ongoing legal saga has escalated as the SEC has doubled down on the pursuit of remedies. 
  • Ripple has contested the relevance of the financial statements, while the SEC has argued its importance.

The gloves are off in the ongoing courtroom clash between the Securities and Exchange Commission (SEC) and Ripple Labs. In a fiery new court filing, the SEC has rejected Ripple’s objections to its demands for financial statements and sales contracts, calling them “baseless” and crucial to determining penalties and preventing future violations.

SEC Doubles Down in Ripple Case

This latest salvo marks a significant escalation in the legal saga, which centers around the SEC’s claim that Ripple’s XRP cryptocurrency constitutes an unregistered security offering. 

While a recent court ruling favored Ripple on the core issue, the SEC is doubling down on its pursuit of remedies, arguing that post-complaint information is essential for crafting appropriate sanctions.

Ripple had previously objected to the SEC’s request for its audited financial statements, claiming it was irrelevant to the case. However, the SEC counters that a defendant’s financial health is standard in calculating penalties, citing legal precedent. 

“Ripple argues that the SEC’s requests are untimely and cites the initial April 2021 scheduling order as contemplating only one discovery period. Ripple is wrong. Subsequent developments have made clear that this initial order was not the last word on discovery. As Ripple notes, it served an expert report relating to remedies during fact discovery.”

Additionally, the SEC argues that Ripple’s planned XRP sales, made after the court’s initial ruling, must be scrutinized through relevant contracts to ensure compliance.

No Escape for Ripple?

The SEC further refutes Ripple’s argument that information about post-complaint institutional sales is immaterial. The regulatory body contends that examining these contracts is vital to assess the likelihood of future violations and ensure Ripple adheres to the court’s order.

Dismissing Ripple’s objections as without merit, the SEC emphasizes its right to gather relevant information. The filing concludes by reiterating that the requested financial records and sales contracts are “highly relevant” and essential for the SEC to “make informed decisions on penalties and remedies.”

On the Flipside

  • Ripple contends that the SEC’s demands for financial statements and sales contracts are excessive and go beyond what’s necessary for regulatory scrutiny.
  • The SEC’s scrutiny of Ripple’s planned XRP sales after the court’s initial ruling is an unnecessary intrusion and may impede the company’s ability to operate effectively in the market.

Why This Matters

This latest development suggests the SEC is determined to see the Ripple case through to the end, even after the initial setback. With both sides digging in their heels, the legal battle is far from over, and the fate of XRP and the broader cryptocurrency industry may hinge on its outcome.

To learn more about the recent market dynamics and how whales are impacting altcoins, read here:
Whales Pour XRP & ETH into CEXs, Triggering Altcoin Sell-off

To delve into Ripple’s response to the SEC’s legal maneuvers and their stance on the untimely lawsuit request, read here:
Ripple Fights Back Against the SEC’s Untimely Lawsuit Request

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Kyle Calvert

Kyle Calvert is a cryptocurrency news reporter for DailyCoin, specializing in Ripple, stablecoins, as well as price and market analysis news. Before his current role, Kyle worked as a student researcher in the cryptocurrency industry, gaining an understanding of how digital currencies work, their potential uses, and their impact on the economy and society. He completed his Masters and Honors degrees in Blockchain Technology within Esports and Business and Event management within Esports at Staffordshire University.