Ripple Vs SEC: Here’s What to Anticipate on May 6 – An Update
The ongoing legal battle between Ripple and the US Securities and Exchange Commission (SEC), which has a significant impact on the price of XRP, is centered around whether testimony from the SEC’s Assistant Chief Accountant, Andrea Fox, should be permitted. Ripple has recently submitted a letter supporting its motion to dismiss new expert evidence, arguing that Fox’s statements should have been introduced earlier during the remedies discovery phase. The SEC is expected to respond by May 6, and a ruling from the court is anticipated shortly thereafter.
The SEC’s recent filing included remarks from Assistant Chief Accountant Andrea Fox regarding Ripple’s financial statements. Ripple has referred to these remarks as “new expert materials” and contends that they should have been presented during the remedies discovery phase of the lawsuit, which has now concluded.
In response, the SEC argues that Fox’s comments do not constitute expert testimony but rather consist of “facts and some basic arithmetic.” Consequently, the SEC has requested that the court reject Ripple’s motion to exclude these new expert materials from the case.
A letter submitted by Ripple yesterday supports its motion, asserting that the statements made by the SEC’s Assistant Chief Accountant, Andrea Fox, should be considered expert testimony. The letter explains that Fox’s analysis, which draws on her accounting expertise to evaluate Ripple’s financial records, should have been disclosed during the earlier remedies discovery phase. Ripple’s letter asserts that regardless of whether Fox is viewed as an expert or a summary witness, the SEC had an obligation to disclose this information before the conclusion of that phase.
The SEC is expected to provide a response by May 6. Subsequently, the court will make a decision regarding the penalties and fines that Ripple may face for its institutional sales of XRP. The SEC has proposed fines totaling $2 billion, whereas Ripple has suggested settling for $10 million.
On May 6, it is anticipated that the SEC will respond to Ripple’s latest arguments. Observers believe that the SEC will continue to advocate for disgorgement and seek a court order to prevent Ripple from selling XRP to institutional investors in the future. The SEC’s challenge to Ripple’s request to exclude new expert evidence suggests that they are aiming to strengthen their case. These upcoming submissions are likely to be the final ones before Judge Analisa Torres decides on the penalties for Ripple’s sales of XRP to institutional buyers.
If Ripple successfully disputes Fox’s declaration, it could limit the SEC’s options for advocating certain penalties.
The lawsuit commenced in late 2020 when the SEC accused Ripple of violating securities laws through its sales of XRP. In July, Ripple achieved a partial victory when a judge determined that XRP sales on exchanges do not constitute securities transactions. However, the dispute over sales to institutional buyers is still ongoing.