Ripple Lawyers Claim SEC’s Request for Financials is Irrelevant

American fintech firm Ripple made the argument that the United States Securities and Exchange Commission (SEC) had “ample opportunity” to demand what material it deemed necessary and that their request to examine additional financial documents was invalid.

The SEC initially filed charges against Ripple in December 2020, accusing the company of raising funds through the sale of unregistered securities through XRP.

The trial between Ripple and the SEC, which began in December 2020, is set to commence in April. In the midst of it, Ripple won a partial victory over the SEC in July 2023, until the judge ruled that Ripple’s XRP token does not qualify as a security when programmatic sales are made on crypto exchanges. 

Ripple Lawyers Pushback Against the SEC

On January 11, the SEC demanded that Ripple produce audited financial statements for the financial years 2022 and 2023. 

However, the deadline for requesting material during the fact-finding phase ended in August 2021.

Disclosure of Contracts

The SEC demanded the disclosure of all contracts related to the sale or transfer of XRP to external entities made after the initial filing and the provision of additional details on the institutional sale proceeds from XRP.

Ripple’s legal team stated in a court filing on January 19 that the SEC had modified its position regarding gathering more data during the discovery phase, which calls for the exchange of pertinent documents between the parties as part of the legal procedure.

Ripple Lawyers Ask Court Not to be Misguided

Meanwhile, Ripple’s legal team emphasized that the court should not be persuaded by the way the blockchain payments technology firm is portrayed by the US regulator.

“The Court should not go down the slippery slope the SEC is paving,” said the lawyers, while adding: 

“In fact, the parties already have litigated whether post-complaint discovery was proper and in the course of that discovery dispute, the SEC never argued that post-complaint discovery was relevant to remedies but instead took the position that post-complaint conduct was entirely irrelevant to the case.”

SEC has Exhausted all of its Interrogatories

In addition, Ripple’s attorneys argued that the SEC had exhausted all of its interrogatories, a list of written questions the SEC might ask Ripple to respond to prior to trial.

“As to the SEC’s interrogatory in particular, the SEC has used all of its interrogatories in the case and cannot unilaterally grant itself more.” was concluded by the filing.