Ripple CEO Says Binance Has Documents Relevant to SEC Lawsuit

Ripple’s lawsuit with the Securities and Exchange Commission (SEC) is now bringing mega crypto exchange Binance into the mix.

Ripple CEO Brad Garlinghouse says Binance holds relevant documents to the court case.

In a new filing with the Southern District of New York on behalf of the CEO, Garlinghouse’s legal team requests documents from Binance that contain information regarding the process by which Garlinghouse conducted transactions on foreign exchanges with the 6th-ranked cryptocurrency XRP. 

“Mr. Garlinghouse seeks foreign discovery on the basis of his good faith belief that [Binance Holdings Limited] possesses unique documents and information concerning this case, and specifically, concerning the process by which transactions in XRP allegedly conducted by Mr. Garlinghouse on foreign digital asset trading platforms were conducted.”

Alleged by the SEC’s amended complaint (AC), Garlinghouse sold more than 357 million XRP ($257,348,709) to “public investors on the market,” and that funds were sold on “worldwide” digital asset trading platforms to investors “all over the world.”

“The SEC seeks disgorgement based on the sales made by Mr. Garlinghouse, including those sales made on digital asset trading platforms located outside of the United States.”

Garlinghouse’s legal team challenged this remark in the AC, specifying that the SEC’s accusation actually only applies to domestic sales and offers of securities, citing section 5 of the Securities Act of 1933.

“In the case of transactions conducted on such foreign trading platforms, both the offers of XRP and the sales of XRP occurred on the books and records of the respective platforms, and therefore geographically outside the United States. The SEC’s failure to allege domestic offers and sales should be fatal to its claims for the reasons set out in Mr. Garlinghouse’s Motion to Dismiss.

… the discovery that Mr. Garlinghouse seeks will be relevant to demonstrating that the offers and sales that the SEC challenges did not occur in this country and are not subject to the law that the SEC has invoked in this case. The entity identified in this Motion is a digital asset trading platform located outside the United States which Mr. Garlinghouse used to transact in XRP. The evidence to be obtained from this digital asset trading platform is probative of the issue of whether “irrevocable liability” was incurred outside of the United States with respect to these transactions.”

Garlinghouse’s response comes as part of the ongoing SEC lawsuit filed against Ripple in December of 2020, which initially alleged that Brad Garlinghouse and Ripple co-founder Chris Larsen sold XRP tokens as unregistered securities. 

 

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