SEC’s Ripple lawsuit is getting murkier with every passing day! Now, the U.S. Securities regulator is now seeking the personal information of two Ripple executives. The SEC has sent the subpoenas to six banks seeking eight years’ worth of transaction information of the Ripple executives. The lawsuit filed in late December 2020 claims that Ripple co-founders misled investors during its XRP ICO sale of 2013.
On Thursday, March 11, the two executives named – Ripple co-founder Christian Larsen and Chief Executive Officer Bradley Garlinghouse – have asked the federal court to block subpoenas. The executives noted that the recent SEC request is a “wholly inappropriate overreach”.
The executives further added that there are no such allegations that their finances were intermingled with Ripple. They also note that the securities regulator has no right to demand everything from the proceeds of the unrelated transactions to “how much money they spend at the grocery store every week.”
The two Ripple executives said that they have already agreed to produce records relating to XRP transactions as well as any other compensation with Ripple. However, the U.S. SEC has “made clear” that this isn’t enough. In a letter to the court accessed by Bloomberg, the lawyers representing the two Ripple executives noted:
“The SEC has not offered and cannot provide a coherent explanation for why it is entitled to this information”.
The Arrogance of U.S. Securities Regulator
A recent piece by Forbes contributor Roslyn Layton writes that the way the SEC has proceeded with the case has been unfortunate. The case was filed during the final hours of the previous SEC Chairman Jay Clayton which raising suspicion. The author notes that the volley of filings makes it clear that “the SEC’s decision to sue Ripple was misguided”. going further, Layton writes:
“Not only is the future of the U.S. crypto industry at stake, but the arrogance of unrestrained regulators making policy through enforcement is on trial as well. The SEC has made clear it doesn’t care how many investors it harms or how many companies it drives overseas as it seeks to stretch its authority beyond common sense”.
Interestingly, the SEC lawsuit also comes at a time when Ripple was already speaking of the securities regulator stifling innovation and suggesting moving outside the U.S. to other crypto-friendly destinations. Following the SEC lawsuit, a number of American partners of Ripple have distanced themselves, recently being MoneyGram calling off its partnership with the blockchain startup. However, it seems that Ripple’s business hasn’t been affected much in the Asia-Pacific region.