The US Securities and Exchange Commission (SEC) is looking for information on the personal financial transactions of two Ripple executives in connection with a lawsuit over an unregistered sale of XRP tokens worth $ 1.3 billion.
The SEC has asked six banks, including SVB Financial Group, First Republic Bank, Federal Reserve Bank of New York, Silver Lake Bank, Silvergate Bank and Citibank, for data on the financial transactions of company co-founder Chris Larsen and CEO Brad Garlinghouse over the past eight years.
Ripple top managers’ lawyers asked a federal judge to block the regulator’s summons sent to institutions. They said the requests were “totally inappropriate abuse of authority” in a claim that was not related to alleged fraud.
Representatives of Larsen and Garlinghouse noted that there is no evidence of the intersection of the personal finances of the defendants with the company’s assets, and the SEC requires data on everything from income unrelated to the cryptocurrency business to “weekly expenses at the grocery store.”
They added that the firm’s executives had agreed to provide data on XRP transactions and compensation from Ripple, but this was not enough for the regulator.
“The SEC has not presented and cannot give a clear explanation of why it has the right to receive this information,” the letter to the court said.
The regulator 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 version of the lawsuit , focusing on the actions of Larsen and Garlinghouse. The SEC believes they manipulated the XRP price and personally received $ 600 million from sales.
The defendants petitioned the court to dismiss the claim , and the CEO of Ripple called it “regulatory arbitrariness.”
Earlier, the SEC accused the company of seeking to evade responsibility by diverting the court’s attention with untenable defense arguments.