In the ongoing legal saga between Ripple Labs Inc. and the U.S. Securities and Exchange Commission (SEC), a recent development has escalated tensions. Ripple has filed a Motion to Strike new expert materials that the SEC submitted in support of its Motion for Remedies and Entry of Final Judgment.
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The SEC vs. Ripple case centers around whether XRP (Ripple’s native cryptocurrency) qualifies as a security under U.S. securities laws. The outcome of this case could have significant implications for the broader cryptocurrency industry.
The Recent Filing
Here are the key points from Ripple’s motion:
- Expert Witness Material: The SEC introduced new expert witness material in its submissions related to remedies and final judgment. This material was provided by Andrea Fox, an accountant in the SEC enforcement division.
- Untimely Submission: Ripple argues that the SEC’s submission of the Fox Declaration was untimely. During the three months of remedies discovery, Ripple served a supplemental expert report on disgorgement, and the SEC deposed Ripple’s disgorgement expert. However, the SEC waited until filing its remedies motion to submit the Fox Declaration.
- Sandbagging Allegation: Ripple contends that the SEC’s actions constitute “sandbagging.” Rule 37©(1) is designed to prevent such behavior, requiring timely disclosure of relevant information during discovery. The Fox Declaration contains accounting analysis and substantive conclusions about remedies that should have been disclosed earlier.
- Identity of Expert Witness: Ripple highlights that the SEC did not disclose the identity of Andrea Fox as an expert witness during discovery. The SEC had previously characterized her as a summary witness, not an expert witness. Summary witnesses do not provide new information.
SEC’s Response
The SEC opposes Ripple’s motion, setting the stage for further legal wrangling. Both parties have agreed to a proposal: Ripple will propose that the SEC has five business days to file an opposition brief, followed by three business days for Ripple to submit a reply brief.
Implications
This latest court filing adds complexity to an already contentious legal battle. Ripple’s challenge to the SEC’s expert material could impact the court’s decision on remedies and final judgment. Meanwhile, the resignation of two SEC lawyers involved in another case against Debt Box has also drawn attention.
As the SEC vs. Ripple drama unfolds, the cryptocurrency community watches closely, aware that the outcome could shape regulatory clarity for digital assets.
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