Jorge Tenreiro, a senior trial attorney at the U.S. Securities and Exchange Commission, claims that neither Ripple CEO Brad Garlinghouse nor co-founder Chris Larsen has provided any documents related to their accounts on foreign exchanges in a letter to Magistrate Judge Sarah Netburn.
Tenreiro stresses that the defendants are refusing to turn over these records despite placing “significant weight” on the fact that they were trading outside the U.S. in their motions to dismiss.
Based on its forensic analysis, the SEC alleges that Larsen and Garlinghouse have transferred hundreds of millions of XRP tokens to at least a dozen foreign trading platforms apart from U.S.-domiciled ones.
Going after foreign exchanges and Ripple’s partners
As reported by U.Today, the SEC has sent a slew of Memorandum of Understanding (MOU) requests to foreign regulators.
The SEC is trying to obtain documents from 14 cryptocurrency exchanges, five companies that use Ripple’s On-Demand Liquidity (ODL) solution, and an investor who bought XRP directly from the distributed ledger company.
Countering Ripple’s arguments, the agency claims that the federal securities laws do not restrict its ability to send requests to foreign regulators:
Nor do the federal securities laws restrict the SEC’s ability to send Requests to foreign regulators once the SEC files a civil action against any particular party. The statute does not distinguish between Requests sent during a civil enforcement action for purposes of obtaining evidence in a continuing investigation and those transmitted for purposes of the litigation.
Three foreign regulators have prohibited disclosing their communications with the SEC while two of them have refused to provide any assistance.
The regulator states that Ripple’s request to turn over these privileged communications is “improper.”