SEC claims Ripple did not disclose data vital for determining securities law violations

• Jorge Tenreiro, senior attorney for the SEC, stated that Ripple did not provide any crucial documents for working out whether the firm committed $1.3 billion worth of securities violations.
• The financial watchdog analyzed wallet addresses associated with Ripple and found hundreds of millions of XRP transferred to at least a dozen of crypto exchanges outside of the United States.
• According to the letter by the commission, Ripple executives have not turned over a single document related to these transfers nor explained the significance of these transactions.

United States Securities & Exchange Commission (SEC) attorney Jorge Tenreir stated in a letter filed to a New York court that Ripple and its executives have not disclosed data critical to the ongoing legal battle.

SEC aims to investigate XRP transfers offshore

The securities regulator sued Ripple Labs and its executives Brad Garlinghouse and Chris Larsen in December 2020 for allegedly violating securities laws regarding the offering of its cryptocurrency, XRP. In mid-April, Ripple Labs filed a motion to dismiss the lawsuit after multiple victories were achieved in court since the initial filing. 

The XRP community has been hopeful that the new SEC Chairman Gary Gensler, who taught cryptocurrency courses at the Massachusetts Institute of Technology, would embrace the new asset class. However, the agency has shown no signs of backing away from its ongoing $1.3 billion lawsuit against Ripple.

Last week, the SEC asked a federal judge to block Ripple’s request to turn over internal emails and communications on officials’ personal devices. The regulator further accused Ripple of trying to “harass” the federal agency, which caused XRP price to plunge. 

In the recent letter filed by the SEC, attorney Jorge Tenreir accused Ripple of not having disclosed data to enable the regulator to figure out whether the blockchain firm committed the securities violations. 

The SEC has found wallet addresses associated with Garlinghouse and Larsen to have transferred hundreds of millions of XRP offshore to at least a dozen crypto exchanges. The agency added:

While the SEC also attempted to obtain this information directly from Ripple, Ripple recently told the SEC that Ripple does not have it either, leaving the only avenue for investigation offshore.

However, the regulator further mentioned that Ripple has not turned over any documents regarding non-US crypto exchange accounts or explained the XRP transfers' significance. 

Since Ripple maintained that it does not have the relevant documents, the SEC must demand documents from third parties. The agency claimed that it “would achieve nothing other than to impede the SEC’s ability to obtain discovery from relevant parties under the existing scheduling order.”

XRP price has seen a pullback from its recent three-year high at almost $2 witnessed earlier this month. With the decaying optimism in the case since Ripple filed a motion to dismiss, the cross-border remittance token has dropped 23.6% in the past week and is trading at $1.05 at the time of writing.