Ripple top executives have asked the court to block subpoenas from the U.S. Securities and Exchange Commission
Ripple’s Chief Executive Brad Garlinghouse and Executive Chairman Chris Larsen have moved to block the SEC subpoenas seeking their bank records. The regulator filed a lawsuit against Ripple last year, claiming the blockchain firm failed to register the native token on its platform XRP as a security.
Larsen and Garlinghouse were named defendants in the case that has since heavily impacted the San Francisco-based company and its token. Not long ago, XRP dropped to 7th place in terms of market capital. The company also announced it was ending its partnership with MoneyGram this week.
The commission alleges that the two executives misguided investors and sold unregistered XRP tokens. Earlier this week, the SEC sent the subpoenas to a total of six banks seeking eight years’ worth of personal financial records of the two. Larsen and Garlinghouse, through their lawyers, wrote to Judge Analisa Torres of the District Court yesterday asking her to dismiss the subpoenas. They described the requests as irrelevant and as a ‘wholly inappropriate overreach.’
The two executives claim the lawsuit doesn’t involve any alleged fraud and therefore doesn’t necessitate the financial information the regulatory body is seeking. According to them, there is no rationality in digging the past bank records as their finances were not associated with the company’s.
They expressed frustrations that the commission demanded details of all financial developments, including “how much money they spend at the grocery store every week.” The executives said they were willing to submit financial details related to XRP transactions and other documents on compensation from Ripple but the SEC rejected them, stating they were not enough.
“The SEC has not offered and cannot provide a coherent explanation for why it is entitled to this information,” their legal team said.
The two are said to have consistently ignored legal advice presented to them to register the token. It is reported that the executives were warned XRP could be viewed as an investment contract (and consequently security) but didn’t heed the advice. Instead, they proceeded to sell the token and earned profits of about $600 million.
Prior to this week’s developments, the two executives had sent separate letters to the federal judge with intentions to file a motion to dismiss.