- In Ripple litigation with the United States Securities and Exchange Commission, the tide may turn
- Ripple CEO Brad Garlinghouse and co-founder Chris Larsen have filed a motion with the SEC asking the agency to investigate 15 offshore exchanges
- Ripple expects that the records of exchanges, including iFinex, will relieve the company
In a Wednesday filing, Ripple requests documents from a total of 15 offshore exchanges. According to the company, the records of the exchanges are likely to completely refute the allegations of the Securities and Exchange Commission. The company claims that Ripple CEO Brad Garlinghouse and co-founder Chris Larsen violated Section 5 of the Securities Act. According to the report, Ripple executives allegedly sold large amounts of XRP to public investors without permission.
New twist in Ripple Litigation?
With the application, Ripple executives are requesting documents from Bitfinex parent company iFinex and 14 other international crypto exchanges. In detail, it is about the exchanges Bitforex, Bithumb, Bitlish, BitMart, AscendEX (formerly Bitmax), Bitrue Singapore, Bitstamp, Coinbene, HitBTC, Huobi Global, Korbit, OKEx, Upbit Singapore and ZB Network Technology.
A supporting memorandum notes that the authorities in the Cayman Islands, Hong Kong, South Korea, the United Kingdom, Singapore, Seychelles and Malta are also requested to cooperate.
At a glance: what is the dispute about?
The Securities and Exchange Commission’s lawsuit against Ripple is about more than two billion XRP, which Garlinghouse and Larsen are alleged to have unlawfully sold to “public investors”. The SEC is therefore demanding a not inconsiderable amount of refunds from the two responsible parties.
Garlinghouse and Larsen are alleged to have violated Section 5 of the Securities Act of 1933. The two Ripple executives deny violating the Act. Ripple emphasizes that section 5 of the Act is simply a ban on the sale of securities without a registration statement in the domestic market. Ripple’s legal representation states that the XRP sales were made only on exchanges outside the United States and therefore outside the jurisdiction of the SEC.
“In the case of transactions conducted on such foreign trading platforms, both XRP’s offerings and XRP’s sales occurred on the books and records of the respective platforms and thus geographically outside the United States. The SEC’s failure to assert domestic offers and sales should be fatal to its claims.“
The original lawsuit against Ripple was amended one more time by the SEC in February. In the new claim, the comission states that the sales of XRP have suppressed the price of the cryptocurrency. In addition, Garlinghouse and Larsen are accused of misleading and holding public investors while selling billions of dollars worth of XRP themselves. The allegation is based on statements made by Garlinghouse at the time of the sales, in which he repeatedly claimed to be absolutely long on XRP.
Can Ripple avert litigation with the new information?
According to Ripple, the crypto exchanges mentioned in the application and the companies behind them have “unique documents and information” regarding the Ripple litigation with the Securities and Exchange Commission. Specifically ,regarding ” the process by which transactions in XRP allegedly conducted by the individual defendants on foreign digital asset trading platforms were conducted.as Ripple’s legal advice notes.
Submission of the application through Ripple comes at a convenient moment. Just a few days ago, the SEC suffered a major defeat in the current litigation. The court rejected a request for insight into the communication between Ripple and its legal advice from the SEC. Thus, the commission is in the dark about the next steps of Ripple.
With the exonerating documents, Ripple could make a U-turn in the litigation.
Conclusion: Ripple is on a good path to overcome the litigation
Recent events in the Ripple litigation are taking a turn for the worse. Things are not looking good for the Securities and Exchange Commission right now and Ripple seems to be gaining the upper hand. The court will decide whether and how the dispute will ultimately end. The fact is that the news on the subject of Ripple is now back in the spotlight of the crypto stage, which could benefit the XRP price with a little luck.
Currently, this is moving at the one US dollar mark, as data from CoinMarketCap show:
So investors who buy XRP can eagerly await the outcome of the dispute.