The U.S. Securities and Exchange Commission (SEC) is seeking information about the personal financial dealings of Ripple’s two top executives—co-founder Chris Larsen and CEO Brad Garlinghouse—in connection with a case over unregistered XRP token sales totaling $1.3 billion.
The SEC has requested data from six banks, including SVB Financial Group, First Republic Bank, Federal Reserve Bank of New York, Silver Lake Bank, Silvergate Bank and Citibank, on the financial transactions of Ripple co-founder Chris Larsen and CEO Brad Garlinghouse over the last eight years.
Lawyers for the Ripple executives have asked a federal judge to block the regulator’s subpoenas issued to the institutions. They argued that the requests are an entirely improper overreach for a suit not related to the alleged fraud.
Representatives of Larsen and Garlinghouse noted that there is no evidence of overlap between the defendants’ personal finances and the company’s assets, and the SEC demands data on everything from incomes unrelated to the crypto business to weekly grocery store expenditures.
They added that the executives had agreed to provide data about XRP transactions and compensation from Ripple, but this was not enough for the regulator.
The SEC has not provided and cannot give a coherent explanation why it is entitled to obtain this information, the court filing states.
In December 2020, accused the company and its executives of selling unregistered securities in the form of XRP tokens. In February the Commission filed an amended complaint, placing emphasis on the actions of Larsen and Garlinghouse. The SEC contends that they manipulated the price of XRP and personally earned $600 million from the sales.
The defendants moved for the court to for dismissal of the suit, and the Ripple CEO described it as regulatory overreach.
Earlier the SEC accused the company of trying to dodge accountability, distracting the court with meritless defense arguments.
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