LUCKNOW (CoinChapter.com) — A federal judge has ordered blockchain firm Ripple to hand over the financial statements of XRP to the Securities and Exchange Commission (SEC). The regulator had requested the information in early January, believing that it would help in determining potential penalties or injunctions for alleged ongoing securities violations.
Magistrate Judge Sarah Netburn issued on Feb. 5. It requires Ripple to produce its 2022 and 2023 financial statements. It also asked Ripple to submit contracts and communications related to institutional XRP sales.
The SEC says examining Ripple’s recent finances and institutional trading data will shed light on whether the company continued improperly offering XRP as an unregistered security even post-complaint.
Recent media reports in late 2023 indicated the SEC could seek around $770 million in penalties against Ripple. However, some legal experts anticipate the final monetary amount imposed may be lower.
Judge Netburn Takes Charge
Judge Netburn’s order comes after Judge Analisa Torres issued a partial summary judgment last year. The judgment found Ripple liable for conducting a $1.3 billion unregistered securities offering through XRP sales to institutional parties but not through programmatic retail sales.
In response to the SEC’s motion to compel production of documents, Ripple had argued the request was untimely and sought irrelevant information.
“The SEC’s request for irrelevant and burdensome post-complaint discovery, especially given the close of fact discovery, should be denied,” counsel for Ripple said.
However, Judge Netburn sided with the regulator in ordering the company to hand over the financial records.
“At this stage, the Court sees no basis to short-circuit that inquiry by denying access to readily available information that may be probative to the remedy stage,” Netburn stated.
Protracted Legal Battle XRP vs. SEC Continues…
Ripple Labs has been engaged in a long-running legal battle with the Securities and Exchange Commission (SEC) since December 2020. That is when the SEC filed a lawsuit alleging Ripple conducted an unregistered $1.3 billion securities offering through its sales of XRP digital tokens.
In January 2024, Ripple CEO Brad Garlinghouse criticized the SEC in an interview. He called the regulator as “very hostile” toward crypto companies. He stated that SEC Chairman Gary Gensler’s approach to regulating the cryptocurrency industry was ineffective and branded him “a political liability.”
Amid all this legal turmoil, XRP is trading at $0.5021, down by 1.05% from a day ago. With a circulating supply of 54 billion tokens, the market cap of XRP currently stands at $27.61 Billion.
