SEC v. Ripple: Court Authorizes SEC to Seek Foreign Info on Ripple and XRP

In a legal victory for the US SEC, a judge has denied Ripple's request for the SEC to stop seeking assistance from foreign regulators to obtain information on Ripple and XRP transactions overseas.

May 20, 2021, | AtoZ Markets – In the SEC v. Ripple case, the US Magistrate Judge Sarah Netburn has authorized the US Securities and Exchange Commission (SEC) to request information on Ripple under a Memorandum of Understanding (MoU) with foreign regulators.

As AtoZ Markets earlier reported, the SEC analyzed wallet addresses associated with Ripple CEO Brad Garlinghouse and co-founder Chris Larsen. The Commission found that hundreds of millions of XRP tokens were transferred to the accounts of unregistered US crypto exchanges.

As a result, the SEC approached nine foreign regulators with a request for documents from 14 trading floors and five companies. Two departments refused to help the American authorities, three refused to disclose the details of the discussion. The others rejected the request.

Ripple's lawyers: US SEC is trying to intimidate foreign partners

According to Ripple's lawyers, the SEC is trying to intimidate foreign partners and force them to sever relations with the company. In April 2021, lawyers asked the court to stop this practice.

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The company argues that the agency must act in accordance with the Hague Convention. This is a slower and less efficient process compared to MoU.

Netburn turned down Ripple's request. In her opinion, the defendants did not prove that such requests "went beyond the scope of any bilateral agreement."

“On the contrary, the courts regularly reject claims that the Hague Convention is the exclusive or priority vehicle for foreign investigations,” she added.

According to the ruling, the SEC is obliged to produce all documents received in response to formal requests. The department is also ordered to provide copies of previously filed appeals within 14 days and report similar actions in the future.

In December 2020, the SEC accused Ripple and its top managers of an unregistered sale of securities under the guise of XRP tokens for $1.3 billion. Later, the agency adjusted the claim, focusing on the actions of Brad Garlinghouse and Chris Larsen.

Related: XRP Advocate Petitions Gary Gensler to Drop SEC Ripple Lawsuit

In April 2021, the court granted Ripple's petition, ordering the regulator to provide access to documents disclosing the SEC's "interpretation and views" of Bitcoin and Ethereum.

What do you think about the judge ruling in favor of the SEC against Ripple over XRP transactions overseas? Let us know in the comments section below.

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