SEC Opposes Ripple Request to Seal Certain Documents Related to Summary Judgment Motions

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The SEC stated that Ripple’s sealing requests should be narrowed to overcome the presumption of public access to information.

The Securities and Exchange Commission has filed its response in partial opposition to Ripple’s motion to seal certain portions of the parties’ filings concerning the motion for summary judgment.

It is worth mentioning that the Defendants seek the complete sealing or redaction of 11 categories of records, comprising more than 900 documents. According to Ripple and its executives, the documents they seek to seal or redact are necessary to protect its sensitive business and financial information, third parties’ sensitive and private business information, etc.

SEC Response to Defendants’ Requests

In a letter dated January 9, 2023, the SEC noted that the proposed redactions are too broad to overcome the presumption of public access under the summary judgment stage. The redactions Ripple seeks are reflected in Sections A through K of the Defendants’ motion.

The SEC said it does not object to Ripple’s request to seal and redact the information contained in six of these categories: C, D, G, H, J, and K. However, it opposes the sealing of certain information in the other five categories: A, B, E, F, and I.

According to the SEC, it does not generally object to Ripple’s request to redact the entire financial statement. However, the agency objects to the Defendants’ overly broad approach to redacting financial information. It believes the request entails redacting every motion of a fact or figure that could potentially be deemed financial.

Furthermore, the SEC noted that it is open to the sealing of Ripple’s most recent audited financial statements from 2020 to date. However, the agency opposes Ripple’s efforts to seal earlier financial statements before 2020.

“[…] because this information goes to the heart of the summary judgment motions, and because Defendants have not made a specific showing of competitive or other harm from disclosure of this information, Defendants’ overly broad sealing requests should be denied,” the SEC noted. 

The SEC noted that Ripple did not prove that disclosing financial statements dated more than five years ago would be detrimental to their current business.

SEC Objects to Further Sealing of Contract Terms Relating to XRP Sales

Notably, the SEC does not wholly agree with Ripple’s request to entirely seal contract terms relating to the company’s XRP sales, which have been put at issue. While the SEC does not object to the redaction of names of Ripple’s counterparties and specific contractual terms like discounts and commission rates, the agency thinks the Defendants don’t have to request further sealing of the contract terms at the summary judgment stage.

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