Thursday, June 20, 2024
HomeAltcoinsJudge Orders Ripple to Provide Financial Documents in SEC Case

Judge Orders Ripple to Provide Financial Documents in SEC Case

A U.S. federal judge has approved the SEC’s request to obtain specific financial documents from Ripple, marking a significant development in the ongoing legal battle between the regulatory body and the blockchain company. In a recent decision by Magistrate Judge Sarah Netburn of the Southern District of New York, Ripple is mandated to provide financial statements for the years 2022 and 2023, along with contracts related to “institutional sales” of XRP. This move aims to determine if XRP can be classified as a security, a central issue in the case.

Judge Netburn’s ruling emphasizes the relevance of Ripple’s post-complaint conduct and its compliance with legal standards since the SEC’s initial lawsuit in December 2020. The SEC’s lawsuit accused Ripple executives, including CEO Brad Garlinghouse and co-founder Chris Larsen, of conducting unregistered securities offerings through XRP sales. Although Ripple secured a favorable summary judgment in July 2023, asserting that XRP was not a security except when sold to institutional investors, the SEC has persisted in its legal actions, excluding Garlinghouse and Larsen from the ongoing case.

Ripple is required to fulfill the document submission by February 12, despite objections from its legal team regarding the timing and necessity of the SEC’s request. The trial, set to commence in April, represents a pivotal moment in the broader regulatory scrutiny over cryptocurrency operations in the U.S. The SEC has notably targeted major exchanges like Coinbase, Kraken, and Binance in its enforcement efforts, with Ripple’s chief legal officer labeling the commission as overly aggressive in its regulatory stance.

The legal proceedings occur amidst security concerns, highlighted by a January incident where Chris Larsen’s personal XRP wallets were hacked, resulting in a loss of approximately $112 million. Binance responded by freezing a portion of the stolen funds, showcasing the ongoing challenges and complexities facing the cryptocurrency industry. This case not only underscores the regulatory hurdles for crypto companies but also the evolving landscape of digital asset security and legal accountability.

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