Ripple must provide financial statements at SEC’s request, judge rules Ripple must provide financial statements at SEC’s request, judge rules
Ripple must also provide post-complaint contracts and answer a question.
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Updated: Feb. 5, 2024 at 10:31 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
The U.S. Securities and Exchange Commission (SEC)’s request to have Ripple produce certain information has been granted by a judge.
Though the SEC’s case against Ripple has otherwise concluded, the agency requested financial statements, contracts, and a response to an interrogatory on Jan. 11 in order to determine penalties and remedies.
U.S. Magistrate Judge Sarah Netburn sided with the SEC on all points in a Feb. 5 filing. First, Judge Netburn said that a separate District Judge will determine remedies based on any available considerations. She said that denying access to available information could “short-circuit” that process and accordingly ordered Ripple to produce financial statements from 2022 and 2023.
Judge Netburn also said that Ripple should produce certain post-complaint contracts governing institutional sales. Ripple has claimed that its post-complaint conduct is structured to comply with court rulings and that injunctions are therefore not appropriate. Judge Netburn, however, said that the SEC should be able to argue against that claim based on the records in question.
Lastly, Judge Netburn said that the SEC can have Ripple answer an interrogatory question about its proceeds from post-complaint XRP sales. Judge Netburn said that the SEC has sufficiently shown that this information will help it determine remedies and accordingly granted permission to serve the interrogatory.
Ripple case otherwise concluded in 2023
The SEC originally filed charges against Ripple in December 2020. Both Ripple and the SEC received partial rulings in their favor in 2023. Judge Analisa Torres ruled that many of Ripple’s programmatic XRP sales, including sales on retail exchanges, were not securities offerings. Judge Torres nevertheless ruled that institutional XRP sales were unregistered securities offerings.
Ongoing proceedings must still determine the extent to which Ripple owes penalties for those institutional sales. The latest decision will not change past rulings, but will put the SEC in a stronger position to argue for penalties and remedies.
Reports from late 2023 suggest that the SEC aims to impose a $770 million fine on Ripple, though some experts believe the final amount may be lower.
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Mike Dalton
Before transitioning to crypto writing in 2018, Mike studied library and information sciences. Currently, he resides on Canada's West Coast.
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The XRP Ledger is a decentralized cryptographic ledger powered by a network of peer-to-peer servers.
Ripple
Ripple is a US-based technology company which develops the Ripple payment protocol and exchange network using XRP, the digital asset native to the XRP Ledger.