Ripple Asks Court to Dismiss The SEC’s Motion to Compel

• Ripple has filed to oppose the U.S. Securities and Exchange Commission’s (SEC) motion to compel.
• According to Ripple, the SEC failed to make its requests while fact discovery was open.
• Ripple also claimed that the SEC failed to justify each of the requests on the merits.

Ripple has filed to oppose the U.S. Securities and Exchange Commission’s (SEC) motion to compel certain post-complaint discovery. In a filing dated January 19, 2024, and addressed to Hon. Sarah Netburn of the Southern District of New York, the blockchain company noted its reasons for opposing the SEC’s requests.

Ripple argued that the SEC’s requests were untimely, noting that the commission failed to make its requests while fact discovery was open. Hence, the agency lacks good cause to do so belatedly. Ripple further noted that both parties already litigated whether post-complaint discovery was proper, during which the SEC never argued that post-complaint discovery was relevant to remedies.

Another reason Ripple stated for opposing the request is the SEC’s failure to justify each of the requests on the merits. According to the filing, the information the SEC seeks has no bearing on the Court’s remedies determination. Ripple argued that the SEC wishes to have the Court substitute a summary determination on the merits of whether Ripple’s post-complaint sales constitute investment contracts.

The blockchain company pleaded with the Court not to heed the SEC’s request, noting that it violates the law and would lead to an intense and prolonged fact discovery period. More critically, the filing argued that the SEC’s summary procedure would deprive Ripple of protections that would apply to a pre-suit investigation of new conduct. It also noted that the SEC had used all of its interrogatories in the case and could not unilaterally grant itself more.

The SEC earlier filed for the Court to compel Ripple to produce audited financial statements for 2022 and 2023. The agency also sought the Court to ask Ripple to produce all post-complaint contracts for the sale or transfer of XRP to “non-employee counterparties” and answer an interrogatory about the amount of “XRP Institutional Sales proceeds” it received after the filing of the Complaint for certain contracts.