Ripple loses patience and wants court to sanction SEC

Rick Steves

“A continuance would reward the SEC for its gamesmanship, and further prejudice Defendants.”

Ripple Labs and the individual defendants, Chris Larsen and Brad Garlinghouse, have filed a letter in further support of their Motion to Strike the SEC’s Metz Supplemental Expert Report, exploring the effect of Ripple news on the price of XRP.

“Dr. Metz failed to present “a complete statement of all opinions” that he “intended to express and the basis and reasons for them” in his initial report, as required by the Federal Rules of Civil Procedure”.

Since the SEC failed to make a necessary disclosure, “the party is not allowed to use that information or witness to supply evidence…at a trial, unless the failure was substantially justified or is harmless”, the defendants argued, adding that the plaintiff failed to prove either of those things.

Ripple added that the firm will suffer significant prejudice if discovery is reopened, not only for the resources allocated but also because of further delays to the resolution of the SEC v. Ripple lawsuit.

SEC’s “gamesmanship” necessitates sanctions

The defendants enumerated a list of reasons why the court should refuse the SEC’s supplemental expert report but the last one was pointier.

“A continuance would reward the SEC for its gamesmanship, and further prejudice Defendants. The SEC has already asked the Court for numerous extensions in this case that Defendants have vigorously opposed”, the letter stated.

“The SEC’s decision to wait until after the very last deposition scheduled in this case to file Dr. Metz’s new reply report necessitates sanctions. Rule 37 sanctions specifically serve several important purposes, such as ensuring that a “party will not benefit from its own failure to comply” and serving as “a general deterrent effect on the case at hand on other litigation. Both rationales apply here. And district courts are “not required to exhaust possible lesser sanctions” if a harsher remedy “is appropriate on the overall record.”

The SEC’s delays tactics are its best leverage against Ripple, which is looking to put the lawsuit behind as fast as possible in order to stay ahead of the competition, this time with more clarity as to the regulatory nature of its activities and XRP.

Ripple might be seeing a light at the end of the tunnel as Judge Sarah Netburn ordered both parties to agree on a schedule for summary judgment. The defendants want the briefing schedule to start by mid-May, while the SEC finds it “premature”. The Joint Proposed Scheduling Order is expected to be filed on April 22, 2022.

Read this next

Digital Assets

Ankr successfully patches hack, will reimburse victims and take actions to prevent further attacks

DeFi protocol Ankr plans to reimburse its affected users after a hacker managed to exploit a bug in its code that allowed for unlimited minting of its liquid staking token.

Industry News

ASIC cancels/suspends AFS license of AFSL Group and Quantum Funds Management

ASIC canceled the AFS license of AFSL Group because it failed to lodge statements and audit reports and it did not maintain AFCA membership. The Australian regulator suspended Quantum because it does not have the required professional indemnity insurance coverage.

Executive Moves

BidX Markets hires Shaun French as Research Analyst – Multi Asset

“We believe with his background in the Financial Markets and being based in Dubai, he will be able to provide our clients with access to outstanding research, while also being in a great location to help support our international clients base which is growing at a rapid pace’’.

Institutional FX

Nasdaq migrates US options exchange to AWS with +10% performance in round-trip latency

Nasdaq has announced the successful migration of the core trading system of Nasdaq MRX – one of its six U.S. options exchanges – to Amazon Web Services (AWS).

Institutional FX

TraditionData launches oil swaps pricing data at a critical time in OTC oil traded markets

TraditionDATA has announced the release of a new proprietary Oil Swap Model (OSM) which brings further visibility into illiquid and opaque oil markets.


TNS connects to Tel Aviv Stock Exchange (TASE) as market data vendor

“This latest exchange connection allows TNS to provide access to approved recipients, including exchange members and market data vendors. This project includes market data for TASE’s equities and increases the number of market data feeds we now offer globally.”

Executive Moves

Cowen Digital taps Taylor S. Cable to lead Europe and Asia operation

“Cowen Digital is a pioneer in delivering institutional grade access to the digital asset ecosystem and I am very excited to join the team at this pivotal time to grow our presence in Europe and Asia.”

Industry News

ASIC sues American Express Australia for lack of TMD on credit cards

“ASIC has now taken multiple actions under the design and distribution regime, including issuing over 20 interim stop orders. This regime turned a new page in the regulation of financial products in Australia and is intended to deliver better outcomes for consumers. It is a priority for ASIC to maximize these increased protections and see the long-term benefits of the DDO regime realized.”

Institutional FX

Eurex reports mixed volumes for November 2022

Deutsche Börse’s derivatives-focused exchange, Eurex today said its total traded derivatives contracts grew by 10 percent in November, from 68.6 million to 75.3 million compared to the same month last year.