A significant development has occurred in the ongoing legal battle between the US Securities and Exchange Commission (SEC) and Ripple Labs. The SEC has succeeded in its motion to compel the blockchain payment company to produce its 2022-2023 financial statements and post-complaint contracts governing institutional sales of the XRP token.
The District Court for the Southern District of New York, presided over by Judge Sarah Netburn, approved the motion on February 5th.
Ripple Under Legal Pressure
According to Fox journalist Eleanor Terrett, the court order requires Ripple to disclose various information related to its financial history and the historical sales of the XRP token itself.
One of the key elements of the court’s order is the demand for Ripple to share its financial statements for the years 2022 and 2023. This requirement aims to provide transparency into the company’s financial position during the specified period, allowing the SEC to gain an understanding of the company’s financial activities.
Additionally, Ripple is now obligated to provide post-complaint contracts governing institutional sales of XRP. These contracts are of particular interest to the SEC as they pertain to the sales of XRP to institutional investors.
The SEC aims to gather essential information about Ripple’s dealings with institutional buyers by obtaining access to these contracts.
Notably, another key aspect of the court order is the firm’s obligation to answer questions regarding the amount of proceeds it received from the institutional sale of XRP.
Deadline Set For Ripple’s Compliance
In the ruling, Judge Netburn stated that the court saw no basis to deny access to readily available information useful in determining an appropriate remedy.
The crypto company had argued that its contracts did not obligate the parties to specific transactions. However, the court found that the SEC had made a sufficient showing that the information sought could assist in shaping the remedy for the case. Therefore, Ripple must respond to the SEC’s interrogatory regarding the contracts.
The court has set a deadline of February 12th for the completion of discovery related to the potential remedy of the suit. As the legal proceedings continue, disclosing Ripple’s financial statements and sales contracts will be crucial in determining the case’s outcome.
It is important to note that the SEC’s allegations against Ripple stem from its assertion that Ripple conducted an unregistered securities offering through the sale of XRP. Ripple has consistently denied these allegations and defends its position in court.
At the time of writing, the price of XRP stands at $0.5083, reflecting a 0.5% decrease in the last 24 hours. Additionally, the cryptocurrency has experienced a sustained decline of 5% over the past 7 days.
Featured image from Shutterstock, chart from TradingView.com
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