On Wednesday, Ripple requested documents from a total of 15 offshore exchanges. According to the company, the reports of the stock exchanges should completely invalidate the allegations of the Securities and Exchange Commission. SEC claims that Ripple CEO Brad Garlinghouse and co-founder Chris Larsen violated Section 5 of the Securities Act. Accordingly, the Ripple executives are charged with selling large amounts of XRP to public investors without permission.
New Twist in Ripple Litigation?
Ripple management team is requesting documents from Bitfinex parent company and 14 other international crypto exchanges. In detail, it concerns the following exchanges: Bitforex, Bithumb, Bitlish, BitMart, AscendEX (formerly Bitmax), Bitrue Singapore, Bitstamp, Coinbene, HitBTC, Huobi Global, Korbit, OKEx, Upbit Singapore, and ZB Network Technology.
The supporting memorandum notes that cooperation of authorities in the Cayman Islands, Hong Kong, South Korea, the United Kingdom, Singapore, Seychelles, and Malta is requested.
In a Nutshell: What Is the Legal Dispute About?
The lawsuit brought by the Securities and Exchange Commission against Ripple concerns more than two billion XRPs that Garlinghouse and Larsen are said to have illegally sold to public investors. The SEC, therefore, requires a considerable amount of compensation from the two responsible parties.
Garlinghouse and Larsen allegedly violated Section 5 of the Securities Act of 1933. The two Ripple executives deny having violated the Act. Ripple emphasizes that Section 5 of the Act is merely a ban on selling securities domestically without a declaration of registration. Ripple’s legal representative states that XRP sales were made on exchanges outside of the United States and therefore outside the jurisdiction of the SEC.
The SEC changed the original lawsuit against Ripple in February. Thus, the Commission alleges that XRP sales reduced the price of the cryptocurrency. In addition, Garlinghouse and Larsen are accused of misleading public investors while they themselves were selling XRP worth billions of dollars.
Will Ripple Be Able to Prevent Litigation?
According to Ripple, the crypto exchanges mentioned have ‘unique documents and information’ regarding the Ripple litigation with the Securities and Exchange Commission. The recent developments in the Ripple litigation are gaining momentum. Things are not looking good for the Securities and Exchange Commission at the moment and Ripple seems to be gaining the upper hand. The court will decide how the legal dispute ultimately ends.
What will happen next? How do you guys think? Feel free to share your thoughts in the comments. Have a great weekend!