The legal battle between the U.S. SEC and San Francisco-based blockchain payments firm Ripple Labs has continued to heat up. In the latest turn of the events, the SEC has moved in court to stop Ripple executives’ motion to deny it access to their personal financial records. The SEC had issued subpoenas to six banks that current and former CEOs, Brad Garlinghouse and Chris Larsen, have been using since 2013.
Ripple has failed to prove why the SEC shouldn’t access the records, SEC claims.
Ripple Labs has failed to prove why the SEC shouldn’t access the records, the financial watchdog argues. It stated in its motion, “The party resisting discovery must show why the requests are not proper and cannot do so with general and conclusory objections as to relevance, overbreadth, or burden.” The watchdog further outlined the two reasons it needs access to the two executives’ financial records. First, it views these records as critical to the claims and defenses in the lawsuit.
“The defendants can’t show the SEC’s request is improper.”
“Bank records are the simplest and most reliable way to deanonymize Individual Defendants’ XRP transactions: they must eventually convert XRP into fiat currency that appears on their bank records because XRP is not legal tender and is not universally accepted for goods and services,” the SEC stated in its rebuttal. Second, the defendants can’t show the SEC’s request is improper. The Ripple execs cited the California state’s privacy rights in their defense. However, the SEC claims that they failed to show that this right is “a valid basis to quash a federal subpoena, and for a good reason: that is not the law in federal court.”