Ripple Files Response Opposing the SEC Motion to Compel For Two Main Reasons

Ripple, the San Francisco-based cross-border payments firm, has recently filed a response to oppose the United States Securities and Exchange Commission (SEC) motion to compel.

Recall that the SEC recently filed a motion to obtain more information from Ripple, which the latter thinks may cause a delay to the progressing lawsuit.

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The SEC in its previous filing, seeks to compel Ripple to produce audited financial statements for the years 2022 and 2023 and post-complaint contracts for the sale or transfer of XRP to “non-employee counterparties”.

The securities regulator also wants the embattled blockchain payments firm to state the amount of “XRP Institutional Sales proceeds” received after the filing of the complaint for certain investment contracts.

Two Main Reasons Why Ripple Opposes SEC Requests

In the court document, Ripple states two main reasons for opposing the SEC requests.

For the first reason, Ripple said the regulator had its time to seek much of the requested discovery while fact discovery was open but failed to do so. The firm said right now, the SEC lacks good cause to make such requests.

Ripple noted:

“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. That motion was resolved after Ripple agreed.”

For the second reason, the firm said the regulatory agency has failed to justify each of its requests based on merits. To back its point, Ripple pointed out that the SEC’s requests have nothing to do with the Court’s remedies determination.

Ripple said, “The SEC apparently wishes to have the Court substitute a summary determination as to whether Ripple’s post-complaint sales constitute investment contracts in place of a full proceeding on the merits to resolve that question.”

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The payments firm thereby urged the court not to go down the slippery slope the SEC is paving. Ripple said a new determination on these requests would require an intense and prolonged fact-discovery period. The firm said it would also create a significant delay that would burden the parties and the Court.

Lastly, Ripple cautioned that the SEC has used all of its interrogatories in the course of the lawsuit and cannot grant itself more.

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