Legal Tug-of-War Intensifies in Ripple and SEC Saga.
Ripple Labs is currently contesting a recent move by the U.S. Securities and Exchange Commission (SEC) to obtain additional financial documents, calling the request untimely and irrelevant. In a new twist to the ongoing legal drama, Ripple’s legal team argues that the SEC’s demands for more data after the discovery phase deadline are unjustified.
The SEC’s demands were met with firm resistance.
Ripple’s lawyers argue in a Jan. 19 legal filing that the SEC’s recent request for access to audited financial statements for 2022 and 2023, along with details of XRP-related contracts and institutional sales, is invalid. The deadline for the discovery stage, a critical period in the legal process for exchanging evidence, has already passed. Ripple’s lawyers point out that the SEC had ample opportunity to request these materials early in the process.
Ripple’s position on the SEC’s questioning
Adding to the controversy, Ripple’s statement highlights that the SEC has exhausted its interrogation quota, a series of formal questions submitted for response before trial. Ripple’s legal team emphasizes that the SEC cannot unilaterally expand its interrogation limits to advance the case.
Legal battle leading up to April showdown
These developments add another step to the ongoing legal battle, which will culminate in a trial that begins this April. The SEC’s lawsuit, which began in December 2020, accused Ripple of conducting unregistered securities offerings through XRP. However, in a significant ruling in July 2023, the judge declared that XRP cannot be treated as a security involved in program sales on cryptocurrency exchanges.
Stuart Alderoty, Ripple’s chief legal officer, recently criticized the SEC, calling it an “out-of-control regulator,” especially in its approach to cryptocurrency regulation.