The SEC and Ripple are going to come face to face at a pretrial conference on Monday.
The U.S. Securities and Exchange Commission has filed an amended legal complaint against Ripple ahead of a pretrial conference showdown that’s due to take place on Monday.
In a court filing, the SEC doubled down on its claims that Ripple violated securities laws by failing to register the sale of 14.6 billion XRP tokens — noting that $1.38 billion was raised “to fund Ripple’s operations and enrich” Brad Garlinghouse and Christian Larsen. It’s claimed that both men personally profited to the tune of $600 million.
According to the regulator, the company “created an information vacuum” and never provided investors with a registration statement to help them make informed decisions.
The SEC also claims that Larsen failed to heed legal advice that XRP may be deemed as an “investment contract” and couldn’t be regarded as a “traditional currency” — and that token sales were “paused” at times when prices were falling. Another paragraph warns:
“Defendants continue to hold substantial amounts of XRP and — with no registration statement in effect — can continue to monetize their XRP while using the information asymmetry they created in the market for their own gain, creating substantial risk to investors.”
The amended filing attracted criticism from Ripple’s general counsel Stuart Alderoty, who tweeted:
“As many of you have seen, the SEC filed an amended complaint today. The only legal claim remains: did certain distributions of XRP constitute an investment contract? Disappointing the SEC needed to try to “fix” their complaint after waiting years to bring it in the first place...