Important Ripple v SEC Lawsuit Update May 21st
TL;DR
- The SEC opposes Ripple’s motion to seal important financial data, arguing that such information is crucial for judicial decisions.
- The legal battle between the entities involves allegations of illegal securities offerings by the company, with both parties recently clashing over certain witness testimony and awaiting the judge’s ruling.
The Battle Goes on
The legal spat between Ripple and the US Securities and Exchange Commission (SEC) keeps offering additional confrontation instead of a final settlement. Most recently, the regulator filed its response to the company’s motion to seal and redact some evidence related to the parties’ briefing on remedies.
“The Court should deny Ripple’s request to conceal financial and securities sales information because that information constitutes “judicial documents” as it is at the heart of the arguments the parties have presented in support of their remedies motion and could, therefore, tend to influence the Court’s remedies decision.”
It is worth mentioning that the Commission does not challenge the sealing of Ripple’s recent financial statements “as a whole.” It is not against the company’s request to seal five exhibits at issue in their entirety and many of its proposed redactions for the purpose of remedies briefings. However, it is firmly against the company’s request to “redact information about its revenues and expenses” dating back to 2014.
According to the SEC, this data could give more clarity about Ripple’s XRP sales and play a key role in the legal process.
“Ripple wants to hide the extent to which it offered XRP at discriminatory prices. But the period when Ripple was offering discounts goes back to 2014 and ended in December 2020. Ripple has not shown how the discounts it offered four years ago and more would matter, particularly since Ripple seeks to avoid remedies by claiming it “has changed the way it sells XRP and changed its contracts,” the agency added.
The Case so Far
The lawsuit between the entities started in December 2020 when the SEC accused Ripple and some of its executives of illegally raising over $1.3 billion in an unregistered securities offering by selling XRP. Over the next few years, the case passed through numerous updates before reaching its trial phase on April 23, 2024.
Shortly after that date, Judge Sarah Netburn entered a new scheduling order focused on the motion for remedies and entry of final judgment. On April 29, the SEC filed its opposition to Ripple’s motion to strike new expert materials. The initiative was centered on testimony from the key witness, Andrea Fox (known as the “Fox Declaration”).
Both entities have clashed on the matter. The company argued that the declaration represents an unsolicited expert opinion, whereas the regulator described it as “standard summary evidence in support of calculations for disgorgement.”
Earlier this month, Ripple filed a letter in further support of its initial request, claiming the SEC failed to show that the testimony is “summary evidence.”
Both parties presented additional documents and letters in the following days, with the American lawyer Jeremy Hogan maintaining they now must wait for the judge’s ruling.
He previously predicted that the lawsuit may officially be closed this summer via a $100 million settlement. The potential sum is far less than the $2 billion penalty sought by the SEC and much more than the $10 million Ripple agreed to pay.
If you want to dive deeper into the specifics of the case and find out how its outcome may impact XRP’s price, please check our dedicated video below:
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