In a recent development, Ripple has filed a response to the Securities and Exchange Commission’s (SEC) motion to compel. As part of its argument, the crypto firm laid out two reasons why the court should not grant the Commission’s request.
Ripple Says SEC’s Requests Are “Untimely”
In the letter addressed to Judge Sarah Netburn, Ripple’s lawyers stated that the SEC’s requests are untimely. According to them, the Commission had “ample opportunity” to request these documents while fact discovery was open. Their failure to do so then means that they lack good cause to do so now, the lawyers claim.
Furthermore, Ripple and the Commission are said to have already argued in court on whether post-complaint discovery was proper. Interestingly, during that period, the Commission never argued that post-complaint discovery was relevant to remedies but instead was of the opinion that all post-complaint matters were irrelevant to the case. As such, Ripple’s lawyers argue now that the SEC should not be allowed to “reverse course now.”
Foul Play From The SEC?
The second reason why Ripple is opposing the SEC’s motion is because of the Commission’s failure to “justify each of its requests on the merits.” The crypto firm’s lawyers argue that these requests are irrelevant to the case and have no “bearing on the court’s remedies determination.” They further allege what looks to be foul play on the part of the Commission.
Ripple highlighted how the SEC looks to be trying to get a summary ruling on whether its post-complaint sales constitute investment contracts or not. This, they believe shouldn’t be an issue for determination at this stage. If anything, it should be put forward in a full proceeding, with the court having a full picture of the case before ruling on such an issue.
Therefore, Ripple is urging the court not to go down the “slippery slope the SEC is paving,” as any of the crypto firm’s actions after the initial lawsuit will need a “second full-blown litigation.” Another litigation could “create a significant delay that would burden the parties and the court,” the crypto firm noted.
Meanwhile, Ripple’s lawyers also advised the court against giving any summary judgment as they stated that it would deprive them of certain legal protections.
As part of its motion to compel, the SEC is seeking to obtain Ripple’s audited financial statements for 2022 and 2023. The Commission also wants the crypto firm to produce all contracts for the sale of XRP, which the crypto company entered into after the initial lawsuit commenced.
Basically, the SEC seems to be looking for evidence that could suggest that Ripple still violated securities laws after their legal battle began.