Ripple filed a motion requesting SEC investigate 14 foreign exchanges. The blockchain firm believes that the records held by the international exchanges will prove that its executives did not violate Section 5 of the Securities Act by selling off units of XRP.
Chief Executive Officer of Ripple Labs Brad Garlinghouse and top executive Chris Larsen have submitted a request to the US Securities and Exchange Commission (SEC) asking them to investigate iFinex and several other international cryptocurrency exchanges in a bid to exonerate themselves from charges laid against them by the SEC.
The SEC had on 22nd December 2020 brought a lawsuit against Ripple Labs and the two executives alleging that they raised up to $1.3 billion dollars illegally by selling unregistered securities. The SEC then revised the lawsuit against the blockchain firm accusing the executives of being involved directly in the sale of about 2 billion units of the digital asset to public investors; a move it claims inhibited the price of the cryptocurrency.
The executives rejected the accusations by the SEC that they were in violation of Section 5 of the 1933 Securities Act, arguing that the digital assets sold were not to domestic investors which is what the section forbids without registration of the assets. Garlinghouse and Larsen’s legal counsel assert that their client’s XRP sales happened on foreign exchanges which were evidently beyond the scope of the SEC.
Documents from Exchanges – a Ray of Hope for Ripple?
The latest motion submitted by the defendants includes a request that the SEC investigate iFinex and 14 other exchanges and was submitted on the 2nd of June. Some of the other international exchanges named in the motion (to name a few) include Bitforex, Bithumb, Bitlish, BitMart, AscendEX (formerly Bitmax), Bitrue Singapore, Bitstamp, Coinbene, HitBTC, and Huobi Global.
The letter of request further goes on to request help and support from the governing bodies in the Cayman Islands, Hong Kong, South Korea, the United Kingdom, Singapore, Seychelles, and Malta.
Ripple claims in its latest motion that the transactions being queried happened on the books and records of the foreign exchange platforms, away from the shores of the United States and that this put the case beyond the scope of the SEC especially since the SEC was not alleging, and could not prove local sales within the United States.
The filing comes merely days after Ripple’s counsels scored a major win against the SEC. The SEC had submitted a request to the court on May 7 to mandate Ripple to make available all communication exchanges about the sale of XRP with the firm’s lawyers. Magistrate Judge Sarah Netburn had ruled to decline the SEC’s motion asserting it was a violation of attorney-client privilege and a breach of trust.
It remains to be seen how the SEC would react to this new motion and what will become of the lawsuit even as the case gets more intriguing. It is also not yet understood at the time of writing what this development will do to the price of the digital asset.
