The long-running legal battle between the Securities and Exchange Commission (SEC) and Ripple is set to take further shape, with the discovery deadline coming up on February 20. The Commission is expected to be furnished with all the documents needed to get the case done and dusted.
Ripple Set To Produce Post-Complaint Contracts
As ordered by the court, Ripple has until February 20 to produce its contracts for the sale of XRP to institutional buyers, hedge funds, and ODL customers in a period that dates back to as far as 2021. These contracts form part of what was requested by the SEC in its motion to compel, which Judge Sarah Netburn granted.
As revealed in its request for an extension of time, Ripple has already produced its 2022-2023 financial statements and responded to the SEC’s interrogatory about post-complaint proceeds. However, the crypto firm had then asked for the remedies-related discovery deadline to be extended to February 20 because of the “burdens and difficulty” in collecting and producing those contracts by the previous deadline of February 12.
This ‘remedies-related discovery’ stage dates as far back as November 9, 2023, when both parties agreed to 90 days for “limited expert discovery” as it relates to remedies. This is specifically to help the SEC (and the court) decide on the appropriate remedy for Ripple’s violation of securities laws through their XRP institutional sales.
Once the discovery stage is done, the case is expected to proceed to the ‘remedies-related briefing’ stage, where the SEC addresses the courts on its findings from documents provided by Ripple. The Commission is then expected to make certain demands from the court regarding the penalty that should be imposed on Ripple.
Demands The SEC Might Make
The Commission is almost certain to request of the court to award a monetary fine against Ripple. The SEC had mentioned in their motion to compel that they were requesting Ripple’s 2022-2023 financial statements in order to assist the court in reaching an appropriate remedy.
Pro-XRP lawyer John Deaton once mentioned that the regulator was demanding $770 million, so they may still be holding on to that. Meanwhile, there is the possibility that the SEC might ask for an injunction as it relates to Ripple’s institutional sales.
The crypto firm argues that it has already structured its post-complaint conduct in compliance with the court’s rulings. However, the Commission isn’t convinced and is seeking to look at the terms of the post-complaint institutional sales contracts in order to avoid any further violations.
