Ripple Ordered to Disclose Financial Statements Following SEC Motion Victory

By Jody McDonald February 06, 2024 In Ripple, SEC
Image: Shutterstock
  • A court has ordered Ripple to provide financial statements, sales contracts and XRP proceeds relating to 2022/23 post-complaint institutional sales of XRP.
  • The information is to be used to determine ‘remedies’ for Ripple’s illegal institutional XRP sales.
  • There are fears Ripple’s punishment may threaten the viability of its On-Demand Liquidity service within the

The SEC won a rare victory in its ongoing legal tussle with Ripple on Monday, with Judge Sarah Netburn granting the regulator’s motion to compel, and ordering the company to provide financial statements, sales contracts and sales proceeds relating to its 2022/23 post-complaint institutional sales of XRP.

Last year Judge Analisa Torres ruled that institutional sales of XRP were effectively illegal securities sales, but that retail sales on secondary markets were not. This new ruling to force Ripple to produce financial information is intended to help the court determine appropriate “injunctive and monetary remedies” for Ripple’s illegal sales.

Ripple Says Financial Information Irrelevant

In trying to avoid the release of its financial information Ripple argued the information was irrelevant because it was not claiming to be unable to pay any penalty regardless of size and that the court could render an appropriate penalty without detailed knowledge of its financial position. Ripple also claimed its financial information was “highly-confidential”.

Judge Netburn disagreed, writing in her ruling: “at this stage, the Court sees no basis to short-circuit that inquiry by denying access to readily available information that may be probation to the remedy stage”.


Similarly, the judge ruled that Ripple’s post-complaint institutional sales contracts and its proceeds from 2022/23 XRP sales were also relevant in determining an appropriate punishment, granting the SEC’s motion in full.

Ripple’s ODL May Be Impacted By Court-Ordered Remedies, Says Lawyer

The possibility of an injunction being ordered against Ripple has sparked some fear that the operation of its On-Demand Liquidity (ODL) service may be impacted. 

Australian lawyer and crypto enthusiast, Bill Morgan, weighed in on this issue on X, suggesting that an injunction may make it difficult for Ripple to sell XRP to its US-based ODL customers in a way that is both legally compliant and commercially viable:

The real issue is a practical and commercial issue. If Ripple can’t sell XRP direct to ODL customers in the US is an alternative mechanism commercially viable for Ripple and prospective US ODL customers.

Bill Morgan, Lawyer and Crypto Enthusiast

Morgan added that this issue will become more important for Ripple, implying it may threaten the company’s future plans in the US:

The SEC is well aware of this commercial issue and the pressure it can place on Ripple, if Ripple cannot structure its future sales in a way that is commercially viable and legally compliant I keep telling people this is a big issue but I am not sure the message is getting through. The issue of sales to ODL customers will eventually become central either on appeal or in the remedies phase.

Bill Morgan, Lawyer and Crypto Enthusiast

Jody McDonald

Jody McDonald

Jody is a Brisbane-based freelance writer who specialises in writing about business, technology, and the future of work.

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