SEC urges to require Ripple to file 2022-2023 financial statements
The regulator asks the court to investigate the company’s operations related to institutional sales
12.01.2024 - 08:55
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What’s new? On January 11, the US Securities and Exchange Commission (SEC) filed a motion in the US District Court for the Southern District of New York in a proceeding against fintech company Ripple. The SEC urged Judge Sarah Netburn to order Ripple to issue financial statements from 2022 through 2023, as well as “post-Complaint contracts governing ‘Institutional Sales.’” Ripple has filed a motion for an additional two days (January 19 instead of January 17) to respond to the motion.
What else is known? The SEC said the contracts containing the sales information relate to Judge Analisa Torres’ July 13, 2023, ruling that the XRP token issued by Ripple qualifies as a security only when sold to institutional investors.
“The SEC requests this limited and targeted discovery to aid Judge Torres in determining whether, having found Ripple liable for violating Section 5 of the Securities Act of 1933, [...] the Court should impose relief such as injunctions and civil penalties and, as to the latter, in what amount,” said the filing.
The SEC has been in litigation with Ripple since December 22, 2020. Officials allege that the XRP token distribution, which began in 2013, was not registered as an offering of securities. There was no evidence of fraud or misrepresentation by Ripple during the litigation.
In July 2023, the court ruled that XRP itself was not a security and could be offered to retail investors through digital exchanges, and rejected the SEC’s attempt to appeal the ruling.
In October, the SEC withdrew the lawsuit against Ripple’s top executives, CEO Brad Garlinghouse and Chairman Chris Larsen. Thus, all charges against Ripple executives were dismissed.
In December, the state of New Jersey proposed that all cryptocurrencies sold to institutions be recognized as securities. Earlier, Gary Gensler, head of the SEC, said that all cryptocurrencies, except for bitcoin, can be recognized as securities.
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