Ripple Vs. SEC Reaches Climax With Final Filing: Details

The
legal
battle
between
Ripple
Labs
and
the
US
Securities
and
Exchange
Commission
(SEC)
has
intensified
with
the
SEC’s
latest
court
filing,
marking
the
final
submission
before
Judge
Analisa
Torres
of
the
Southern
District
of
New
York
deliberates
on
the
remedies
phase
of
this
landmark
case.

Ripple
Vs.
SEC:
The
Final
Move

In
its

filing
dated
May
20,
2024,
the
SEC
provided
a
comprehensive
rebuttal
to
Ripple’s
request
to
seal
certain
financial
documents
and
other
evidence
crucial
to
the
case.
The
SEC’s
letter
to
Judge
Torres
articulates
a
staunch
opposition
to
Ripple’s
motion,
particularly
concerning
the
concealment
of
financial
data
and
contractual
terms
integral
to
the
Court’s
evaluation
of
appropriate
remedies.

The
SEC’s
opposition
hinges
on
the
principle
of
public
access
to
judicial
documents,
a
cornerstone
of
legal
transparency
and
accountability.
Citing
Lugosch
v.
Pyramid
Co.
of
Onondaga,
the
SEC
emphasizes
the
historical
importance
of
public
access,
especially
in
cases
that
involve
public
interest
and
regulatory
enforcement.
“The
common
law
right
of
public
access
to
judicial
documents
is
firmly
rooted
in
our
nation’s
history,”
the
SEC
forcefully
argues
in
its
brief,
highlighting
the
necessity
of
transparency
for
public
scrutiny
and
trust.

While
the
SEC
consents
to
the
sealing
of
five
exhibits
in
their
entirety,
it
contests
the
company’s

request
to
withhold
key
financial
figures
and
terms
of
contracts
cited
in
the
remedy
deliberations.
This
includes
details
that
would
reveal
Ripple’s
current
financial
health,
the
volume
of
recent
XRP
sales,
and
the
specifics
of
revenue
and
expenses—all
deemed
vital
for
assessing
the
company’s
compliance
and
determining
any
potential
penalties.

The
SEC
critically
assesses
the
motives
for
sealing:
“Ripple
invites
the
public
to
form
opinions
about
the
merits
of
the
SEC’s
positions.
It
cannot
simultaneously
hide
from
them
the
evidence
on
which
that
position
is
based,”
the
SEC
stated,
pointing
to
a
contradiction
in
the
company’s
public
communications
versus
its
courtroom
requests.

Ripple’s
justification
for
its
sealing
requests
cites
the
potential
harm
that
public
disclosure
of
sensitive
financial
details
could
inflict
on
its
competitive
position
in
the
market.
However,
the
SEC
counters
this
by
highlighting
inconsistencies
in
Ripple’s
argument
about
the
relevance
and
sensitivity
of
the
information.

The
Commission
challenges
the
claim
that
the
sealed
information
is
irrelevant,
stating,
“Once
an
item
is
deemed
relevant
to
the
exercise
of
judicial
power,
the
weight
to
be
given
the
presumption
of
access
must
be
governed
by
the
role
of
the
material
at
issue
in
the
exercise
of
Article
III
judicial
power.”

The
SEC
also
notes
the
staleness
of
some
information
Ripple
wishes
to
seal,
arguing
that
financial
details
from
years
past
are
unlikely
to
impact
Ripple’s
current
business
operations
significantly.
“Stale
business
records
cannot
support
the
necessary

finding
of
harm,”
the
SEC
argues,
reinforcing
its
stance
on
the
need
for
transparency
of
outdated
financial
records.

As
Judge
Torres
prepares
to
make
her
ruling,
the
crypto
industry
watches
closely.
The
stakes
are
notably
high,
with
the
SEC
proposing
fines
and
penalties
amounting
to
approximately
$2
billion,
while
Ripple’s

counteroffer
recommends
a
maximum
penalty
of
merely
$10
million.

At
press
time,
XRP
traded
at
$0.53487.

Featured
image
from
Shutterstock,
chart
from
TradingView.com