By: Eva Baxter
U.S. Securities and Exchange Commission (SEC) has stated that their demands for Ripple's audited financial documents from the past two years are both 'procedurally proper' and 'relevant'. This was in reply to Ripple's opposition, which argued that the request was irrelevant, untimely, and unjustifiable. Ripple held the view that a reevaluation of this requirement may unnecessarily delay the proceedings.
The regulator shed light on the procedural soundness of such examination requests, underlining the importance of the solicited information specifically designed to promote their argument. Such developments in the case necessitated further discovery, the SEC suggests. The regulator emphasized on the importance of Ripple's financial statements in determining a potential penalty, using past precedents that peg a defendant's wealth as a primary factor in calculating a penalty with a view to prevent misconduct.
Initially accused by the financial regulator of conducting unregistered securities offerings through its sales of XRP in December 2020, Ripple faced a prolonged legal battle with the SEC for about four years. Ripple claimed a crucial verdict in 2021 when the judge proclaimed that certain sales of XRP, specifically, programmatic and exchange sales, did not fit within the category of securities offerings.
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