In a lawsuit dated May 13, 2024, Ripple Labs formally asked the U.S. District Court for the Southern District of New York to seal various documents that were filed in connection with the SEC's request for judgment and damages. These documents, collectively referred to as “remediation materials,” contain sensitive financial data, including audited financial statements, revenues, expenses, and other confidential business information.
Breaking Ripple's request for seal
Ripple's legal counsel, Andrew J. Ceresney of Debevoise & Plimpton LLP, is profiled in letter Judge Analisa Torres has the rationale behind the request. Ceresny's argument focuses on the potential harm to the company's competitive position, stating that “public disclosure of this information would be extremely harmful because it would expose detailed information about Ripple's financial position, long-term business plans, revenue streams, and expense structures to the public.” The market, including competitors, customers, business partners, and future customers.
Ripple's primary goal is to secure discounts for institutional buyers of XRP. The proposal identifies three main reasons to justify their request for sealing.
Protecting highly confidential financial information: Ripple emphasizes the critical nature of the documents it seeks to seal, especially its audited financial statements and related materials.
According to Ceresny, “The documents and information are non-public and their disclosure would cause significant harm to Ripple’s business interests and competitive position.” He argues that these documents contain sensitive financial metrics that are vital to maintaining the company's ownership strategies and competitive position in the market.
Maintaining bargaining power: Another important aspect of the order is protecting the details of its financial terms negotiated with external business partners. The company asserts that disclosing the terms of the sale of XRP may harm its competitive position and negatively affect its negotiating capabilities in future deals.
The proposal details the potential ramifications, stating that “disclosing the financial terms of its contracts with counterparties and customers (…) could result in serious harm to Ripple’s negotiating position with future counterparties, and may cause competitors to adjust their sales plans and pricing policies.” “. To compete with Ripple in the market.”
This section underscores the concern that such disclosures can not only harm an individual's bargaining power but also provide competitors with unfair insights into a firm's strategic operations.
Ensuring privacy of non-parties: Ripple is also seeking to redact the identities of non-party entities such as XRP investors, customers, and business partners, emphasizing that their privacy must be protected because their identities and contact information are irrelevant to the legal issues at hand and could be misused if disclosed.
“The identities of these non-parties have no bearing whatsoever on the court’s decision on whether to propose remedies, and therefore their privacy interests outweigh the presumption of public access,” the motion explains. Ripple emphasizes that such disclosure poses unnecessary risks to the individuals and entities involved and does not contribute to resolving the case.
Ripple's legal team also points out that the SEC has not opposed many seal requests, which may play in favor of their proposal. Citing previous cases where the court granted similar requests to seal and redact, the motion suggests there is strong precedent supporting their request.
Pro-XRP lawyer Bill Morgan Comment“The company has every right to seek to protect commercially sensitive information. In this case, the need for Ripple to even apply to seal information regarding deductions arises from the SEC putting this in evidence and its weak argument that financial harm is being suffered by an institutional investor.” developed (…)”.
At press time, XRP was trading at $0.507.
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