SEC and Ripple ‘at an impasse’ as legal drama moves closer to an end

Ripple and the SEC may have reached a summary judgment, but there are a few final steps – and arguments to be had – before the case is closed


Ripple and Adobe Stock modified by Blockworks


The Securities and Exchange Commission is seeking a court to order Ripple to hand over financial statements and sales contacts, according to a Thursday filing. 

The letter, sent to Southern District of New York Magistrate Judge Sarah Netburn, comes months after presiding Judge Analisa Torres handed down her summary judgment in the case, partially siding with Ripple. 

Torres’ ruling stated that institutional sales of Ripple’s XRP token do constitute an unregistered securities offering, but programmatic sales – those done via crypto exchanges – do not. 

Now the SEC is seeking Ripple’s financial statements from 2022 and 2023, and contracts pertaining to institutional sales that are dated after the securities regulator filed its initial complaint in December 2020. 

SEC attorneys also request that Ripple reveal how much it made in proceeds from institutional sales since the complaint was filed on contracts dated pre-complaint. The information is needed, the SEC says, to help Torres determine what, if any, injunctions and civil penalties Ripple should face. 

Read more: Ripple commits to buying back $285M worth of shares

The letter comes as the deadline for remedies-related discovery looms on Feb. 12. Thursday’s filing marks the SEC’s first motion relating to the damages discovery period, which was scheduled in November.  

The SEC claims, in Thursday’s filing, that Ripple has not produced any post-complaint discovery at all. After “several” Zoom calls and emails, Ripple and the SEC have been unable to come to an agreement regarding the SEC’s latest request, an “impasse,” the SEC said, the court must settle. 

“Even though Ripple has unjustifiably objected to all requests, the SEC is only moving to compel on two narrow document requests and on one interrogatory,” the SEC wrote in Thursday’s filing. 

Courts “routinely” consider post-complaint conduct when determining remedies, the SEC said, so their request is within reason. 

The SEC has one month after the remedies-related discovery deadline to submit its case to the court regarding Ripple’s remedies, and Ripple then has one month to object. It is possible the parties will come to a settlement agreement regarding remedies, which the court would have to approve.

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