U.S. Securities and Exchange Commission Revives Ripple Lawsuit Controversy with Rejecting Demands

In an effort to gauge Ripple’s financial stability and sales activity before trial, the SEC has re-ignited the litigation by requesting more documents.

The U.S. Securities and Exchange Commission (SEC) has suddenly ramped up its battle against Ripple Labs Inc., after a lengthy period of quiet that led many to believe the SEC had abandoned the Ripple action. The SEC requested further records from Ripple from a New York court on January 11, 2024.

First and foremost, the SEC wants Ripple’s financial records for the years 2022 and 2023. Decisions on fines and court rulings will be based on their assessment of Ripple’s financial stability. A second request concerns the documentation of “institutional sales” contracts that Ripple entered after their first legal troubles. If the SEC wants to punish Ripple appropriately, it needs these materials.

If Judge Torres finds Ripple guilty of violating the Securities Act of 1933, the SEC says these records will assist him in determining whether or not the company should pay fines. They think it’s critical to know Ripple’s financial situation and recent steps to avoid further breaches.

In response, Ripple has argued that the SEC’s requests are excessive and irrelevant to the matter at hand. But the SEC is certain that Ripple’s current and future sales and financial situation are crucial in determining whether or not to prohibit them from future infractions and, if so, what fines they should pay.

On July 13, 2023, Judge Analisa Torres ruled that sales to institutions were unlawful but not public sales of XRP. The SEC’s effort to contest this was rejected. The allegations against Ripple’s senior executives were also withdrawn. The trial is scheduled to take place on April 23, 2024, with the last hearing being on April 16, 2024.

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