Lawyers representing Ripple Labs have declared that the United States Securities and Exchange Commission’s (SEC) request to examine additional financial documents is not valid, given the deadline has already passed and lacks relevance.
In a recent court filing on Jan. 19, Ripple’s legal team claimed that the SEC has changed its stance on collecting additional information during the discovery phase — which requires each party to share relevant documents with the other as part of the legal process.
Just last week the SEC demanded that Ripple produce audited financial statements for the financial years 2022 and 2023, disclose all contracts related to the sale or transfer of XRP (XRP) to external entities made after the initial filing, and provide additional details on the institutional sale proceeds from XRP
However, the deadline for requesting material during the fact discovery phase has already concluded, with Ripple arguing that the SEC had “ample opportunity” to demand what material they deemed necessary.
“In fact, the parties already have litigated whether post-complaint discovery was proper and in the course of that discovery dispute, the SEC never argued that post-complaint discovery was relevant to remedies but instead took the position that post-complaint conduct was entirely irrelevant to the case.”
— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) January 19, 2024
Meanwhile, Ripple’s legal team argued that the court should not be swayed by the portrayal that the U.S. regulator is presenting against the blockchain technology company.
“The Court should not go down the slippery slope the SEC is paving,” the lawyers stated.
Furthermore, Ripple’s lawyers contended that the SEC used up all of its interrogatories, which are a list of written questions that the SEC was able to put forth to Ripple to answer before trial.
“And lastly, as to the SEC’s interrogatory in particular, the SEC has used all of its interrogatories in the case and cannot unilaterally grant itself more,” it was stated.
Let’s unpack #Ripple‘s response to the SEC filing!
Ripple argues the SEC is asking for unnecessary information and trying to subvert the legal process. Let’s outline the argument:
(As always, thanks to @FilanLaw, for the file!) https://t.co/CxUa527AFC
— WrathofKahneman (@WKahneman) January 20, 2024
The trial between Ripple and the SEC is set to commence in April. The regulator initially filed charges against Ripple in December 2020, accusing the company of raising funds through the sale of unregistered securities through XRP.
However, Ripple secured a partial victory against the SEC in July 2023, with the judge ruling that the XRP token is not a security when it comes to programmatic sales on crypto exchanges.
Cointelegraph recently reported that Ripple chief legal officer Stuart Alderoty has referred to the SEC as an “out of control regulator” due to its position on crypto.