Ripple’s Request to Keep its Documents Sealed is “Troubling” and “Problematic,” Says SEC

Ripple wants to keep its official documents under seal as it fights a court battle over allegations that it sold illegal securities. But the trial senior attorney at SEC, Jorge Torneiro, thinks Ripple’s request is “problematic.” 

The attorney stated in his letter to Magistrate Judge Sarah Netburn on March 30, that Ripple is attempting to obscure critical information that’s relevant to the case. As the senior attorney stated:

“That Ripple wishes to continue obscuring critical facts relevant to this case from its investors remains troubling and highlights the need for the investor-protector disclosure requirements imposed by the registration provisions of the Securities Act of 1933”.  

Ripple claims that those documents contain confidential and private information, hence the request not to disclose them. However, the Securities and Exchange Commission (SEC) disagrees and claims that those requests oppose the principle of public access.

SEC filed a lawsuit against Ripple, a U.S.-based technology company behind the cryptocurrency XRP, on Dec. 22. The lawsuit involved both former CEO of Ripple Christian Larsen and Brad Garlinghouse, the current CEO.

It cited that the tech company’s officials have conducted an unregistered digital assets securities offering worth $1.3 billion by selling their tokens. As the main objective of the SEC is to enforce the law against market manipulation and protect investors, it claimed that Ripple exchanged the token for “labor and marketing services” and promoted XRP as a result.

The Director of SEC’s enforcement division Stephanie Avakian stated:

“Issuers seeking the benefits of a public offering, including access to retail investors, broad distribution and a secondary trading market, must comply with the federal securities laws that require registration of offerings unless an exemption from registration applies.”

Ripple took 39 days to respond to the accusations in the public forum, indicating their attempts to maintain their reputation and show the clients that there’s nothing to worry about. The company, however, responded on Twitter, defending XRP, claiming that it’s not an investment asset,  and saying that they have worked with the SEC for a long time, making sure their actions are in line with the law.

The lawsuit had dire consequences for the XRP price on the market, which dropped drastically. And as the trial is not yet over, the future of XRP on the market remains unclear.