Court Orders Response to XRP Sales Contract Dispute: Ripple vs. SEC Intensifies

Ripple once again finds itself at the center of attention as the Securities and Exchange Commission (SEC) takes a significant step in its ongoing dispute with the company. The SEC has filed a motion requesting that Ripple disclose its financial statements for the fiscal year 2022-2023, as well as the contracts governing its institutional sales. This move further escalates the tension between Ripple and the SEC.

The SEC’s motion was submitted on January 11 to the Southern District of New York Magistrate Judge Sarah Netburn. The request asks the court to mandate Ripple’s submission of its financial statements and sales contracts.

This action comes after Judge Analisa Torres’ previous ruling on July 13, 2023, where she ruled in favor of Ripple to some extent. However, she concluded that the company had violated regulations by engaging in unregistered transactions and selling securities to certain institutional buyers, hedge funds, and ODL customers.

Judge Torres’ verdict highlighted that Ripple had unlawfully sold approximately $729 million worth of XRP through these transactions. The decision was based on provisions within the Institutional Sales contracts, which indicated that the parties involved did not view XRP as a commodity or currency sale.

Despite multiple attempts to reach Ripple through calls and emails, the company has yet to provide any of the post-complaint documents. The SEC, undeterred by Ripple’s objections, is now seeking to compel the production of two specific document requests and one interrogatory.

The court has given both parties a one-month window to respond, which extends beyond the deadline for remedies-related discovery. This timeline allows the SEC to present its case to the court and gives Ripple the opportunity to object. There is speculation that a settlement may be reached, considering the impending deadlines and the history of contentious exchanges between Ripple and the SEC.