Blockchain company Ripple has been ordered to share financial statements regarding its cryptocurrency sales with regulators.
The ruling was handed down by a New York judge and requires Ripple to share statements and information about the sale of XRP tokens with the U.S. Securities and Exchange Commission (SEC), CoinDesk said, citing court documents. This was reported on Tuesday (February 6th).
The SEC requested that information last month following a landmark ruling in a lawsuit against Ripple. The lawsuit, filed in 2020, accuses the company of conducting an offering of $1.3 billion in unregistered securities related to the XRP token.
Last year's ruling by Judge Annalisa Torres found that only Ripple's sales of XRP (institutional, not retail) violated the law, which the crypto sector saw as a victory.
As PYMNTS wrote at the time, the ruling has “widespread implications for the entire digital asset ecosystem, which has long maintained that tokens do not represent securities contracts.”
However, the CoinDesk report notes that courts had found Ripple liable for the violations before the lawsuit was filed in 2020. The SEC claims these documents will help the court determine whether Torres should issue an injunction or civil penalty since then.
The order requires Ripple to share its 2022 and 2023 financial statements and institutional sales agreements since the lawsuit was filed.
Ripple objected to the SEC's requests last month, calling them untimely and arguing that the commission “failed to justify each request.”
“The SEC's unrelated and burdensome post-complaint discovery request should be denied, especially given that fact discovery has concluded,” the company's lawyers wrote.
Last year, Ripple announced that the SEC would dismiss allegations that Ripple CEO Brad Garlinghouse and Executive Chairman Chris Larsen aided and abetted the company in violating securities laws. Ripple has once again won in court.
Meanwhile, the company recently announced plans to expand its payments business in the United States.
W. Oliver Segovia, Ripple's senior director and head of product marketing, said last week that 90% of Ripple's business is currently based overseas, but that could change soon.
“While we have been relatively quiet in the U.S. regarding Ripple payments for the past three years, we are ready to announce new product updates leveraging the Money Transfer License (MTL), which covers the majority of U.S. states,” Segovia wrote on LinkedIn. It’s done,” he wrote.
