Ripple Labs and the SEC are at a key point in their legal battle. The SEC’s latest court brief is the last statement before Southern District of New York Judge Analisa Torres resolves this important case’s remedies.
The SEC responded to Ripple’s request to seal financial papers and other evidence in a detailed reply on May 20, 2024.
The SEC strongly opposes Ripple’s move to withhold financial facts and contractual clauses crucial to the Court’s remedy determination in its letter to Judge Torres. Public access to court papers is essential for openness and accountability, and the SEC supports it.
The SEC emphasizes public access in public interest and regulatory enforcement proceedings, citing Lugosch v. Pyramid Co. of Onondaga. “The common law right of public access to judicial documents is deeply rooted in our nation’s history,” the SEC said, stressing openness.
The SEC seals five documents but denies Ripple’s request to conceal financial information and contract conditions.
Ripple’s financial health, recent XRP sales volume, and income and spending statistics are essential for determining compliance and fines.
The SEC condemns Ripple for concealing these information: Ripple lets the public evaluate the SEC. The SEC claims Ripple’s public and legal views are incompatible because it cannot hide information supporting that viewpoint.
Ripple claims that revealing financial information will hurt its competitiveness. The SEC responds by pointing out Ripple’s contradictions in its relevance and sensitivity claims.
The SEC notes, “Once an item is deemed relevant to judicial power, the presumption of access must be based on its role in the exercise of Article III judicial power.”
The SEC also notes that Ripple seeks to conceal obsolete financial data, stating that they won’t hinder its business operations. “Stale business records cannot justify the necessary finding of harm,” the SEC says, emphasizing openness.
The crypto sector awaits Judge Torres’ ruling. The stakes are huge, with the SEC seeking $2 billion in fines and penalties and Ripple suggesting $10 million. Judge Netburn must decide whether Andrea Fox is a summary or expert witness before Judge Torres’s judgment, which might complicate the matter.
This case will affect the bitcoin sector. A verdict against Ripple might lead to US securities law regulation of other digital assets. If Ripple wins, the sector may be stronger against regulatory issues and digital currencies may be clarified.
