XRP Lawsuit: Ripple Objects To SEC’s Mischaracterizations

In the XRP lawsuit, Ripple Labs Inc. has submitted a motion to file a sur-reply in response to what it terms as “significant factual mischaracterizations” by the US Securities and Exchange Commission (SEC), intensifying the ongoing case. This legal maneuver, presented before Judge Sarah Netburn of the Southern District of New York, marks a critical juncture in the proceedings.

The SEC has requested the court to mandate that Ripple provide audited financial statements for the years 2022-2023, along with documents detailing the sale or transfer of XRP to entities other than employees. Additionally, the SEC seeks information regarding the proceeds Ripple received from institutional sales of XRP following the lawsuit’s initiation.

While Ripple had objected to this request, the SEC refutes these objections, stating that Ripple is wrong in its claims.

Ripple Submits Motion To File A Sur-Reply

Ripple’s counsel argues in the motion that the SEC’s recent submissions contain inaccuracies that necessitate clarification. Specifically, Ripple disputes the SEC’s portrayal of its resistance to producing certain post-complaint contracts. The sur-reply motion states, “Ripple specifically objected to the SEC’s request as ‘overly burdensome.’” This direct contradiction challenges the SEC’s narrative and emphasizes the dispute over the burden of document production.

Moreover, Ripple rebuffs the SEC’s allegations regarding the extent of contract documentation provided in the related class action suit, Zakinov v. Ripple Labs Inc. The SEC had claimed that Ripple “recently catalogued and presumably produced, in the ongoing class action suit, all of Ripple’s XRP sales contracts from 2020 to June 2023.” Ripple’s response in the motion was unequivocal, stating, “That is false as well. Ripple did not produce any contracts post-dating December 22, 2020, in Zakinov.”

The motion for leave to file a sur-reply underscores Ripple’s intent to correct the record, especially concerning the breadth of the SEC’s discovery requests.

Ripple’s counsel highlighted the SEC’s overreach, pointing out that their discovery request “seeks contracts beyond the ODL contracts referenced generally in the Declaration, including contracts with or relating to vendors, consultants, independent contractors, grants, donations and other counterparties — i.e., contracts that would relate to ‘Other Distributions,’ which the Court held at summary judgment are not sales of investment contracts.”

In seeking the court’s permission to file this sur-reply, Ripple aims to ensure that the court’s decision is informed by a precise understanding of the facts, particularly in light of the SEC’s latest false claims. As noted in the motion, “The Court would benefit from the sur-reply letter because it will clarify the issues in dispute and allow the Court to rule on an accurate record.”

XRP Price Drops Lower

At press time, XRP traded at $0.51095. Following the decline below the 0.618 Fibonacci retracement level ($0.552), which also signifies an exit from the prior trading range, attention is now shifting towards the $0.498 mark (0.786 Fibonacci level). This newly established range is pivotal, as a breakout in either direction could significantly influence the short-term trajectory of the XRP price.

XRP price
XRP price closed below key resistance, 1-day chart | Source: XRPUSD on TradingView.com

Featured image from Shutterstock, chart from TradingView.com

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