A Magistrate Judge has approved a motion to compel by the U.S. SEC, mandating Ripple to produce certain documents that would help determine penalties against the blockchain firm.
The long-standing lawsuit between the United States Securities and Exchange Commission (SEC) and Ripple is nearing its climax.
The courts had ruled that trading of XRP on exchanges did not constitute securities transactions, while institutional XRP sales by the company were indeed illicit securities transactions.
At this stage in the ongoing feud, both parties are seeking to come to an agreement on a reasonable penalty for Ripple’s violation of securities laws.
While the parties could reach such a decision independently, the SEC filed a motion compelling Ripple to produce certain financial records that would enable the court to determine the size of the penalty that the company would pay.
Magistrate Approves SEC Motion in SEC Case
On Monday, Magistrate Judge Sarah Netburn approved the SEC’s motion, handing the regulator another rare win in the legal battle.
The motion compels Ripple to produce its 2022-2023 financial statements, and contracts used to sell XRP to institutions before the SEC’s complaints filed in December 2020. Ripple has until February 12 to produce the information.
Additionally, the firm will answer an interrogatory disclosing the proceeds it has received from institutional XRP sales after the SEC’s complaints. Defense lawyer James Filan shared the latest court update.
#XRPCommunity #SECGov v. #Ripple #XRP Magistrate Judge Netburn has granted the @SECGov’s Motion to Compel in its entirety. pic.twitter.com/QrFZjGbUNN
— James K. Filan ???? (@FilanLaw) February 5, 2024
Although Ripple tried to argue against providing such documents, the firm must now comply with the court orders. Notably, the documents will reveal Ripple’s financial strengths to the SEC and also the amount realized from XRP sales.
Such knowledge would enable the regulatory body as well as the court to impose an appropriate fine and other penalties on the blockchain company.
At this point, it is unclear the amount that the SEC would seek from Ripple to settle the charges against the company.
However, XRP-friendly lawyer John Deaton believes the fine amount would be around $10 million-$100 million, with the SEC possibly looking to extract as much money as possible from Ripple for a lengthy litigation process.