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Ripple, SEC Say Settlement Unlikely Before Trial Over Alleged Securities Violations

The SEC's case over allegedly unlawful sales of XRP by Ripple to retail investors is entering the discovery phase.

Обновлено 14 сент. 2021 г., 12:11 p.m. Опубликовано 16 февр. 2021 г., 9:51 a.m. Переведено ИИ

The U.S. Securities and Exchange Commission (SEC) and Ripple said Monday there's little chance of settlement ahead of the expected trial of the blockchain payments firm over alleged securities infractions.

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In a discovery letter addressed to Federal Judge Analisa Torres at the U.S. District Court for the Southern District of New York, the parties said that having previously discussed the matter, they "do not believe there is a prospect for settlement at this time." They further noted that previous settlement discussions took place under the Trump administration and were mainly conducted with division directors who have since left the SEC.

More widely, the letter addresses the discovery for the pending trial, with two parties agreeing (or not) the formal process of exchanging information about the witnesses and evidence they'll be presenting.

In December, the SEC sued Ripple over alleged violations of federal securities laws. It said the company, CEO Brad Garlinghouse and Chairman Chris Larsen sold over $1 billion in XRP to retail investors without registering the cryptocurrency as a security or seeking an exemption.

Notably, the SEC told the judge in Monday's letter it is seeking to take five depositions beyond the 10 normally allowed over allegations "Ripple and Larsen received two legal memos warning them that there was some risk that XRP would be considered 'investment contracts' and therefore securities under the federal securities laws."

Ripple has refused to comply saying the documents fall under attorney-client privilege and that the SEC’s request is "improper and lacks legal foundation." The SEC may ask the court to compel Ripple to provide documents and related deposition testimony, the regulator said in the letter.

The initial pretrial conference between the defendant, the prosecutor, and the judge will be held on Feb. 22. The SEC aims to file a first amended complaint by Feb. 19, 2021, with the discovery period now set to be complete by Aug. 16, said the letter.

CORRECTION (13:20 UTC, Feb. 16, 2020): Amended headline to remove use of term "fraud," which was not alleged in the complaint.

Ripple SEC Legal

Tanzeel Akhtar

Tanzeel Akhtar has contributed to The Wall Street Journal, BBC, Bloomberg, CNBC, Forbes Africa, Financial Times, The Street, Citywire, Investing.com, Euromoney, Yahoo! Finance, Benzinga, Kitco News, African Business Magazine, Hedge Week, Campden Family Office, Modern Investor, Spear's Wealth Management Magazine, Global Investor, ETF.com, ETF Stream, CIO UK, Funds Global Asia, Portfolio Institutional, Interactive Investor, Bitcoin Magazine, CryptoNews.com, Bitcoin.com, The Local, The Next Web, Mining Journal, Money Marketing, Marketing Week and more. Tanzeel trained as a foreign correspondent at the University of Helsinki, Finland and newspaper journalist at the University of Central Lancashire, UK. She holds a BA (Honours) in English Literature from the Manchester Metropolitan University, UK and completed a semester abroad as an ERASMUS student at the National and Kapodistrian University of Athens, Greece. She is NCTJ Qualified - Media Law, Public Administration and passed the Shorthand 100WPM with distinction. She does not currently hold value in any digital currencies or projects.