Ripple Petitions SEC to Investigate Foreign Exchanges


Ripple has filed a motion with the court asking the SEC to investigate several foreign exchanges they believe “possess unique documents and information” regarding its legal battle with the agency.

June 3, 2021 | AtoZ Markets – Ripple CEO Brad Garlinghouse and co-founder Chris Larsen have filed a motion with the court asking the US Securities and Exchange Commission (SEC) to investigate several overseas trading platforms.

According to the petition, the SEC must request documents from iFinex (parent company of Bitfinex), Bitforex, Bithumb, Bitlish, BitMart, AscendEX (formerly Bitmax), Bitrue Singapore, Bitstamp, Coinbene, HitBTC, Huobi Global, Korbit, OKEx, Upbit Singapore, and ZB Network Technology.

In a cover letter, Ripple stressed that the regulator will need the support of the authorities in the Cayman Islands, Hong Kong, South Korea, the United Kingdom, Singapore, Seychelles, and Malta to do this.

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

The commission claims that they manipulated the price of the token and sold 14.6 billion XRP worth more than $1.38 billion. The sales were allegedly carried out to “public investors” located “around the world.”

According to the defendants, the records obtained from foreign exchanges will allow them to prove that they did not violate the fifth section of the Securities Act of 1933, which prohibits the sale of unregistered securities in the United States.

Ripple executives noted that the sale of XRP tokens was carried out on foreign exchanges, which means they did not fall under the jurisdiction of the SEC.

In the case of trades conducted on foreign trading floors, both the offering and selling of XRP were conducted through the order books of the respective platforms geographically located outside the United States. The SEC’s failure to prove the offer and domestic sales should be fatal to its claims,” the document says.

Lawyer Jeremy Hogan emphasized that this issue concerns exclusively compensation for damages by the leaders of Ripple. If the SEC asks for documents and they confirm the correctness of the defendants, the case will still not be closed.

In turn, the regulator asked the court to extend the period for the exchange of evidence by 60 days. The SEC said it has already collected testimony from several witnesses, but it needs to hear at least eight more people. The agency would also like to see the Ripple documents.

Recall that in April, the Justice of the Peace Sarah Netburn granted Ripple’s petition for access to SEC documents disclosing its “interpretation and views” regarding Bitcoin and Ethereum.

In May, Netburn authorized the SEC to request information on Ripple as part of a memorandum of understanding with foreign regulators.

AtoZ Markets also reported that Netburn rejected the SEC’s petition for access to Ripple’s legal advice records regarding XRP’s legal status.

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