Court Update: New Filing Reveals What Ripple Wants To Hide From Public

In
a
court
filing
on
May
13,
2024,
Ripple
Labs
has
formally
requested
the
United
States
District
Court
for
the
Southern
District
of
New
York
to
seal
various
documents
that
were
submitted
in
connection
with
the
SEC’s
Motion
for
Judgment
and
Remedies.
These
documents,
collectively
referred
to
as
the
“Remedies
Materials,”
contain
sensitive
financial
data,
including
audited
financial
statements,
revenue,
expenses,
and
other
confidential
business
information.

Breaking
Down
Ripple’s
Request
To
Seal

Ripple’s
legal
counsel,
Andrew
J.
Ceresney
of
Debevoise
&
Plimpton
LLP,
articulated
in
the

letter
to
Judge
Analisa
Torres
the
rationale
behind
the
request.
Ceresney’s
argument
focuses
on
the
potential
damage
to
the
company’s
competitive
position,
noting,
“Public
disclosure
of
this
information
would
be
highly
detrimental
because
it
would
reveal
detailed
information
about
Ripple’s
financial
condition,
long-term
business
plans,
revenue
streams,
and
expense
structures
to
the
marketplace,
including
competitors,
customers,
and
future
business
partners
and
customers.”

A
core
objective
of
Ripple
is
to
seal
the
discounts
offered
to
institutional
buyers
of
XRP.
The
motion
lays
out
three
main
reasons
to
justify
their
request
for
sealing.

Protection
of
Highly
Confidential
Financial
Information:
Ripple
emphasizes
the
critical
nature
of
the
documents
it
seeks
to
seal,
particularly
its
audited
financial
statements
and
related
materials.

According
to
Ceresney,
“The
documents
and
information
are
non-public
and
their
disclosure
would
cause
significant
harm
to

Ripple’s
business
interests
and
competitive
standing.”
He
argues
that
these
documents
contain
sensitive
financial
metrics
that
are
vital
to
maintaining
the
company’s
proprietary
strategies
and
competitive
position
in
the
marketplace.

Preservation
of
Negotiating
Power:
Another
significant
aspect
of
the
request
is
to
protect
the
details
of
its
financial
terms
negotiated
with
third-party
business
partners.
The
company
asserts
that
revealing
the
XRP
sale
terms
could
compromise
its
competitive
position
and
adversely
affect
its
negotiating
capabilities
in
future
deals.

The
motion
details
the
potential
repercussions,
noting,
“Revelation
of
the
financial
terms
of
its
contracts
with
counterparties
and
customers
[…]
could
result
in
serious
damage
to
Ripple’s
negotiating
position
with
future
counterparties,
and
would
cause
competitors
to
adjust
their
sales
plans
and
pricing
policies
to
compete
with
Ripple
in
the
marketplace.”

This
section
underscores
the
concern
that
such
disclosures
could
not
only
harm
its
individual
bargaining
power
but
also
provide
competitors
with
unjust
insights
into
the
company’s
strategic
operations.

Ensuring
Privacy
of
Non-Parties:
Ripple
also

seeks
to
redact
the
identities
of
non-party
entities
like
XRP
investors,
customers,
and
business
partners,
asserting
that
their
privacy
should
be
protected
as
their
identities
and
contact
information
are
irrelevant
to
the
legal
issues
at
hand
and
could
be
misused
if
disclosed.

The
motion
articulates,
“The
identities
of
these
non-parties
have
no
bearing
at
all
on
the
Court’s
resolution
of
the
Remedies
Motion
and
therefore
their
privacy
interests
outweigh
the
presumption
of
public
access.”
Ripple
stresses
that
such
disclosure
poses
unnecessary
risks
to
the
individuals
and
entities
involved
and
does
not
contribute
to
the
resolution
of
the
case.

Ripple’s
legal
team
also
points
out
that
the
SEC
has
not
opposed
several
of
the
sealing
requests,
which
might
play
in
favor
of
their
motion.
Citing
previous
cases
where
the
court
granted
similar
requests
for
sealing
and
redaction,
the
motion
suggests
that
there
is
a
strong
precedent
supporting
their
request.

Pro-XRP
lawyer
Bill
Morgan

commented,
“a
company
has
every
right
to
seek
to
protect
commercially
sensitive
information.
In
this
situation,
the
need
for
Ripple
to
even
apply
to
seal
information
on
discounts
arises
from
the
SEC
putting
this
in
evidence
and
its
weak
argument
that
pecuniary
harm
is
suffered
by
a
sophisticated
institutional
investor
[…].”

At
press
time,
XRP
traded
at
$0.507.

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