ripple SEC bank accounts
Regulation,  Ripple,  XRP

Ripple Execs to SEC: Stay out of our bank accounts

Brad Garlinghouse and Chris Larsen accuse the Securities and Exchange Commission of seeking a ‘fishing expedition’ through their personal finances

The two Ripple executives being sued personally as part of the U.S. Securities and Exchange Commission lawsuit claiming XRP is an unregistered security have asked a judge to stop the agency’s “fishing expedition” through their bank accounts and personal finances.

Ripple Executive Chairman Chris Larsen (Photo: Ripple)

Ripple CEO and Brad Garlinghouse and executive chairman Chris Larsen are being sued personally over their sale of a combined $600 million of XRP. The agency is demanding they “disgorge”—hand over—those profits, as well as the nearly $1.3 billion Ripple made selling the cryptocurrency over the past seven years.

The agency has demanded all personal financial records of both men for that time period. 

“The SEC’s multi-front attempt to troll through the Individual Defendant’s personal financial information in a non-fraud litigation, where the Defendants have already agreed to produce the relevant information regarding the challenged transactions, is a wholly inappropriate overreach,” the pair’s lawyers said in March 11 filing. “[T]he personal financial records being sought have literally nothing to do with the SEC’s allegations or the conduct at issue.”

Noting that they have agreed to turn over all financial record relevant to the sale of XRP, the lawyers said “how much money they spend at the grocery store every week,” is irrelevant.

Neither is charged with fraud for intermingling their personal finances with the company’s, and the SEC is therefore not entitled to seek documents “sufficient to understand [their] financial condition during the time of the conduct at issue.” It continued:

“The SEC is not entitled to troll through the Individual Defendants’ detailed personal financial records solely on the pretext that it has to prove that they—like virtually every other living person—would view making money as a positive thing.”

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Leo Jakobson, Modern Consensus editor-in-chief, is a New York-based journalist who has traveled the world writing about incentive travel. He has also covered consumer and employee engagement, small business, the East Coast side of the Internet boom and bust, and New York City crime, nightlife, and politics. Disclosure: Jakobson has put some 401k money into Grayscale Bitcoin Trust.