Court demands Ripple to provide financial statements to the SEC.

 Judge Sarah Netburn gave Ripple until February 12 to comply with an order requiring it to give the SEC information on contracts that signed after the case filed. The United States Securities and Exchange Commission may ask Ripple for specific financial documents after a federal judge approves the order.

One of the key questions regarding whether XRP counts as security is whether Ripple must produce financial statements from 2022 to 2023 and contracts governing “institutional sales,” which is why the SEC filed a motion on February 5 in U.S. District Court for the Southern District of New York, which Magistrate Judge Sarah Netburn granted. The SEC may be able to refute Ripple’s assertions that its actions have complied with the court after the initial filing through the post-complaint contracts.

Regarding the request for post-complaint XRP institutional sales income, Judge Netburn declared, “The controversy before this Court is whether to order Ripple to answer this interrogatory and not what weight to assign to Ripple’s response.” “Ripple must respond to the Interrogatory because the SEC has sufficiently demonstrated that this information may aid the Court in crafting its remedy.”

Ripple’s Legal Battles and Regulatory Challenges

In December 2020, the SEC filed a complaint against Ripple and its CEOs, Chris Larsen and Brad Garlinghouse, claiming that the companies sold unregistered securities using XRP coins. In July 2023, a judge decided that XRP is only considered a security when it is offered to institutional investors. he issued a summary judgment in favor of Ripple. Later on, the SEC attempted to have its case against Larsen and Garlinghouse dismissed, but not Ripple.

Judge Netburn gave Ripple until February 12th to abide by the informational order. In a letter dated January 19, Ripple’s legal team opposed the SEC’s move for material to produced, claiming that the commission’s request was “untimely” and that it did not provide sufficient justification for the order. The SEC v. Ripple trial is schedule to start in April.

Enforcement actions have brought by the SEC against Coinbase, Kraken, and Binance, among other significant U.S. exchanges. Because of its position on cryptocurrencies, Stuart Alderoty, the chief legal officer at Ripple, has called the commission an “out of control regulator.” In one of the biggest hacks of 2024, a hacker gained access to Larsen’s personal XRP wallets in January and stole tokens valued at almost $112 million On February 1st, Binance announced that it had frozen $4.2 million worth of purloined funds.