The Securities and Exchange Commission (SEC) has obtained a major ruling in its favor in the ongoing lawsuit against Ripple Labs, the company behind the XRP cryptocurrency. The court granted the SEC's motion to compel Ripple to produce key financial documents and answer an important question about its XRP sales.
The SEC filed a lawsuit against Ripple in December 2020, alleging that the company and its executives had raised more than $1.3 billion through an ongoing, unregistered digital asset securities offering of XRP. Ripple has denied the allegations, arguing that XRP is not a security but a medium of exchange.
The case has attracted a lot of attention from the crypto community as it could have major implications for the status and regulation of cryptocurrencies in the US. The court's latest ruling is a setback for Ripple as it will have to disclose sensitive information that could strengthen the SEC's case.
Under the court order, Ripple must provide the SEC with its financial statements for 2022-2023, which the SEC says are essential to determining an appropriate remedy in the event of a judgment in its favor. Ripple had argued that its financial health was irrelevant and highly confidential, but the court disagreed and concluded that this information was potentially probative for the remedy stage.
Ripple must also respond to additional questioning about profits from its institutional sales of XRP after the initial complaint was filed. The SEC maintains that this information could help calculate any disgorgement, which is the repayment of ill-gotten gains. Ripple opposed this request, saying it was irrelevant and burdensome, but the court found that the SEC had sufficiently demonstrated that this information could help craft an appropriate solution.
The court also ordered Ripple to produce any post-complaint contracts it entered into with third parties regarding XRP. The SEC had requested this information to demonstrate that Ripple continued to offer and sell XRP as a security after the complaint was filed. Ripple had argued that the SEC's request was untimely and previously barred by the court's ruling in June 2021. However, the court clarified that the previous denial was contextual, tied to experts' discovery of merit, and did not control the matter. current.
The court's ruling is a major victory for the SEC as it will give it access to crucial evidence that could support its accusations against Ripple. The ruling also shows that the court is taking a broad and exhaustive approach to the discovery process, which could prolong the litigation and increase pressure on Ripple to reach a settlement. The case is expected to go to trial in early 2024, unless the parties reach a resolution before then.
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Source: https://azcoinnews.com/sec-scores-major-win-against-ripple-in-ongoing-lawsuit.html
