The legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC) continues to heat up, as the SEC recently filed a response opposing Ripple’s motion to seal and redact certain evidence related to potential remedies in the case. This move could have significant implications for both parties.
SEC Argues for Transparency, Public Interest at Stake
The SEC’s primary argument against sealing this information centers on transparency and public interest. They claim Ripple’s attempt to conceal financial reports, details on XRP sales to institutions after the lawsuit began, and other sensitive details are unlawful.
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The SEC contends this information is crucial to determining appropriate remedies in the case, such as disgorgement, injunctive relief, and penalty amounts, which the SEC believes should be $1.95 billion.
According to the SEC, public access to details like Ripple’s current assets, recent XRP sales figures, and revenue and expense data is essential for the court to make informed decisions regarding potential penalties. Additionally, the SEC argues that information on discounts offered to some institutional investors is relevant in assessing potential harm to investors.
Furthermore, the SEC challenges Ripple’s claim that public disclosure would cause substantial harm. They assert that the requested information is not particularly new or sensitive and may already be partially available publicly. Additionally, the SEC argues that past instances of the court sealing documents in this case don’t necessarily set a precedent for the current motion.
Ripple Faces Potential Disclosure
Pro-XRP attorney Bill Morgan predicts Ripple will likely be unsuccessful in keeping the financial details sealed. While the SEC clarified that the discounted sales to institutions were not Ripple’s On-Demand Liquidity (ODL) contracts, they are still pursuing a permanent injunction to halt all ODL sales. This suggests the SEC may not view ODL contracts as investment contracts, a potentially positive sign for Ripple.
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The SEC’s stance on public access to Ripple’s financial records raises questions about transparency in the ongoing lawsuit. If the court sides with the SEC, it could expose sensitive financial data and potentially impact Ripple’s business operations.
Conversely, a favorable ruling for Ripple could limit public scrutiny of the case and its potential ramifications for the cryptocurrency industry.
The outcome of this motion will likely have a significant impact on Ripple’s business, as the company’s request to keep some of its dealings with institutional investors secret might be in jeopardy.
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