Key Insights
- Judge orders Ripple to provide SEC financial data and details on institutional XRP sales since 2020
- Request follows ruling that Ripple liable for $1.3 billion in unregistered token offerings before SEC lawsuit
- SEC says records will help decide if injunctions or fines warranted for period after case was filed
NEW YORK (MarketsXplora) – Ripple Labs has been directed to provide the U.S. securities regulator with financial records and details on institutional sales of its XRP token since 2020, according to court filings released on Monday.
U.S. Magistrate Judge Sarah Netburn signed an order that compels the crypto firm to produce 2022-2023 financial statements plus contracts related to institutional XRP transactions.
The Securities and Exchange Commission (SEC) requested the records in January to help decide on whether to seek injunctions or fines against Ripple after it was found liable last year for conducting $1.3 billion of unregistered XRP securities offerings.
Ripple had opposed the request as too broad and irrelevant given the recent partial judgment that said only certain institutional XRP sales broke the law, not all transactions involving the token.
But Netburn granted the SEC access to information to aid its proposal of post-2020 remedies, though the scope she allowed was narrower than first sought by the regulator.
The SEC filed a lawsuit against Ripple and top executives in December 2020 alleging they raised over $1.3 billion through unregistered XRP digital token offerings over seven years.
In a partial judgment last July, U.S. District Judge Analisa Torres ruled Ripple liable for conducting those sales but found the SEC had failed to establish that wider XRP distributions were similarly non-compliant.
The case is seen as a test of the crypto asset market’s arguments that digital tokens can function both as a store of value and a medium of exchange.