In a recent development, blockchain company Ripple has been mandated by a New York judge to disclose financial statements concerning cryptocurrency sales to the U.S. Securities and Exchange Commission (SEC). The SEC had sought this information last month, following a crucial ruling in a 2020 lawsuit against Ripple. The lawsuit alleged that the company engaged in a $1.3 billion unregistered securities offering related to its XRP token.
Last year, Judge Analisa Torres ruled that only Ripple’s institutional, and not retail, sales of XRP violated the law, marking a victory for the crypto sector. However, Ripple was found liable for violations predating the 2020 lawsuit. The SEC contends that these documents will aid in determining whether the court should impose injunctions or civil penalties for the period since then.
The court order necessitates Ripple to share financial statements for 2022 and 2023, along with contracts for institutional sales since the lawsuit’s initiation. Ripple had previously opposed the SEC’s request, labeling it untimely and asserting that the commission failed to justify each request on its merits.
Despite this legal tussle, Ripple recently announced plans to expand its payments business in the United States. The SEC initially sued Ripple over unregistered XRP sales more than three years ago. The recent court ruling allows the SEC to gather additional information to determine suitable penalties, requiring Ripple to furnish financial statements and contracts governing institutional XRP sales. Ripple’s opposition claimed the company’s financial health was irrelevant to the matter. However, the court emphasized the need for access to pertinent information during the remedy stage.
As the legal battle unfolds, Ripple’s business remains primarily overseas, constituting 90% of its operations. However, the company anticipates potential changes in this dynamic in the near future.
Digital Assets Desk