Ripple Labs has intensified its legal battle against the US Securities and Exchange Commission (SEC), challenging the SEC’s reliance on its current financial condition to determine penalties. In a new document submitted to Judge Analisa Torres of the Southern District of New York, Ripple argues against the SEC’s push for penalties of nearly $2 billion, suggesting a $10 million cap instead.
The document, written by Andrew J. Ceresney of Debevoise & Plimpton LLP, addresses two crucial points in the ongoing conflict. Firstly, Ripple refutes the SEC’s claim that its current financial situation should impact court rulings on past penalties. Ripple argues that its financial condition at the moment has no relevance to the matter, stating that it is not arguing an inability to pay any penalty and that there is no reason to believe that its current financial statements are relevant to the court’s analysis.
Ripple emphasizes that disclosing private financial information is unnecessary and that the court can reject the case without considering such information. It cites legal cases, such as Tropical Sails Corp. v. Yext, Inc., which recognize a legitimate privacy interest in the financial documents of privately held companies.
The second main argument addresses the SEC’s assertion that changes in the XRP sales process make Ripple’s past contracts obsolete. Ripple’s CFO, Jonathan Billich, argues that these previous contract terms are still private and economically sensitive, despite being referred to as “stale” material by the SEC. Ripple contends that future counterparties could gain significant advantage if they had access to conditions established in earlier agreements. It emphasizes that its sales techniques have evolved, and the current XRP sales no longer include the terms present in earlier over-the-counter agreements.
Ripple also disputes the SEC’s claim that XRP prices must be made public under securities legislation. It highlights that the court has already ruled that XRP is not a security, even if it were to be considered an investment contract requiring registration. Therefore, the price terms in historical contracts differ from those applicable to registered securities.
In conclusion, Ripple asserts its right to privacy and business sensitivity, arguing that its past contracts and present financial status are irrelevant to the SEC’s case. It maintains that it has a valid basis for sealing its confidential financial documents.
Meanwhile, CoinGecko data shows that the price of XRP is currently $0.5177, experiencing a 2.03% decline in the last 24 hours and a 2.21% drop over the previous seven days. A previous report by CNF highlights pro-XRP lawyer Bill Morgan accusing the SEC of corruption in its case against Ripple.