The legal brawl between Ripple and the U.S. Securities and Exchange Commission (SEC) nears a climax. The financial regulator’s latest court filing marks the final submission before the presiding judge considers the remedies phase of this monumental lawsuit.
SEC Wants To Make Ripple’s Financial Records Public
The Securities and Exchange Commission has submitted its opposition to Ripple’s motion to seal some financial documents, according to a May 20 filing.
The SEC contends that Ripple’s request to “conceal financial and securities sales information” from the public is unlawful and that the material in question such as financial figures and other details are essential to requested remedies. Citing Lugosch v. Pyramid Co. of Onondaga, the regulator also stressed the historical significance of public access, particularly in cases of regulatory enforcement. “The common law right of public access to judicial documents is firmly rooted in our nation’s history,” said the SEC.
The suit, which was lodged in late 2020, revolves around the SEC’s assertions that Ripple conducted an unregistered securities offering via the sale of the XRP cryptocurrency. Ripple scored a partial win in July 2023, when Judge Analisa Torres found that XRP was not a security in itself, but that institutional XRP sales constituted investment contracts.
As per the earlier released joint schedule, Ripple, the SEC, and any third parties were expected to file letter briefs on May 20, 2024, opposing omnibus letter motions to seal. This represents the final deadline for the joint proposal decided on by both parties.
Final Clash Before Long-Awaited Verdict
While the SEC agrees to seal five exhibits, it challenges the fintech firm’s request to conceal key financial figures and contract terms noted in the remedy deliberations. This includes details that would disclose Ripple’s current financial health, the volume of recent XRP sales, and the specifics of revenues and expenses—all considered vital for assessing the company’s compliance and deciding potential penalties.
SEC also argues that Ripple failed to show reasonable evidence of how exposing the information to the public would result in significant injury warranting sealing. The agency further added that the financial records are outdated, and some evidence is already available to the public. “Stale business records cannot support the necessary finding of harm,” the SEC posited.
In terms of the next steps in the case, the crypto industry will be closely watching as Judge Analisa Torres makes her ruling on the remedies. The stakes are incredibly high, with the SEC requesting a fine of up to $2 billion. Ripple, however, contested the SEC’s “Draconian remedial requests”, suggesting that any fines should not exceed $10 million.
Although the exact time of Judge Torres’ judgment is not known, Ripple’s recent statements reveal that they expect a resolution in the coming few months.
At the time of writing, the XRP price is holding above $0.54, after gaining 6.1% on the day. XRP enthusiasts remain optimistic about the token’s future despite its recent sluggish performance. The conclusion of the Ripple v. SEC lawsuit could be the catalyst for propelling XRP to the elusive $3 milestone.
