SEC Wins Against Ripple in the Motion To Compel: What’s Next?

• The SEC wins its motion to compel as the court orders Ripple to submit necessary financial documents.
• Ripple objected to the SEC’s demand twice, arguing that the SEC’s demand was “untimely” and misleading.
• The court asserts that the financial documents would be beneficial in further proceedings.

In a recent development in the SEC-Ripple legal dispute, the U.S. Securities and Exchange Commission (SEC) won its motion to compel Ripple to provide additional documents to the court. The U.S. District Judge Sarah Netburn ordered Ripple to submit financial documents and post-suit XRP contract details to the commission.

Fox Business Journalist Eleanor Terrett took to X to report the crucial turn in the prolonged legal saga. According to her post, Ripple is supposed to produce its 2022-2023 financial statements and post-complaint contracts involving XRP’s institutional sale. In addition, the company is required to provide clear explanations to the SEC’s questions regarding the amount of XRP institutional sales proceeds it received.

The SEC filed the Motion to Compel on January 11, asking Ripple to produce the required documents for further investigation on the company’s institutional XRP sales. However, Ripple opposed the motion, arguing that the SEC’s move was “untimely.” Citing that the SEC’s motion violates the legal boundaries, Ripple requested the court to dismiss the filing.

In a subsequent reply to the letter, the SEC reiterated their demand for Ripple’s financial details. As a response, Ripple filed a Sur-Reply, spotting the regulator’s “significant misstatement of facts.” While the SEC allegedly claimed that Ripple responded to the document submission as burdenless, Ripple argued that it was “over burdensome.”

Nonetheless, in the court’s recent move, the SEC won over Ripple, with the court granting the regulators to obtain the desired documents. The Judge cited,

At this stage, the Court sees no basis to short-circuit that inquiry by denying access to readily available information that may be probative to the remedy stage. Accordingly, Ripple is ORDERED to produce its 2022-2023 financial statements under the parties’ protective order.

The court asserted that the additional information about Ripple’s financial dealings would help obtain remedies against Ripple. In addition, the details regarding XRP’s institutional sale would help decide “whether an injunction is necessary and just.”