Ripple Files Motion to Strike SEC Expert Submissions in XRP Saga

Amidst the ongoing legal battle with the SEC, Ripple Labs Inc. has filed a motion to strike newly introduced expert materials, arguing that the SEC's timing and strategy constitute unfair practice. Ripple challenges the late submission of an expert declaration and accompanying exhibits, alleging that it was untimely and not disclosed during the designated discovery period.

Ripple Labs Files Motion to Strike New SEC Expert Materials in Ongoing Litigation

In a significant legal maneuver, Ripple Labs Inc. has filed a motion to strike new expert materials submitted by the Securities and Exchange Commission (SEC) in the ongoing court saga that has captured significant investor attention.

Ripple's Motion

Ripple Labs argues that the SEC's introduction of a new expert declaration and accompanying exhibits, prepared by Andrea Fox, after the agreed discovery deadline constitutes unfair legal practice. This declaration, submitted in support of the SEC's motion for remedies and entry of final judgment, is being contested by Ripple on grounds of untimeliness and non-disclosure during the designated discovery period.

Andrea Fox, an Assistant Chief Accountant in the SEC's Division of Enforcement, provided detailed accounting analyses aimed at calculating the net profits Ripple allegedly gained from what the court previously ruled as unauthorized securities sales of XRP.

Ripple contends that Fox's input clearly extends beyond mere summarization of data, engaging in substantive accounting judgments without prior disclosure as an expert witness. "This is precisely the type of 'sandbagging' that Rule 37(c)(1) is designed to prevent," Ripple's legal team emphasized, citing Abraham v. Leigh as a precedent.

SEC's Position and Ripple's Rebuttal

During the legal proceedings, the SEC categorized Fox not as a factual or expert witness but as a "summary witness." Ripple, however, argues that her deep dive into financial records and application of specialized accounting knowledge squarely positions her as an expert witness, necessitating earlier disclosure as per Federal Rule of Civil Procedure 26(a).

Ripple's filing stresses the procedural disadvantage imposed by the SEC's timing, which deprived Ripple of the opportunity for a thorough cross-examination of Fox's findings and to present a rebuttal report. Such actions, according to Ripple, necessitate striking the late disclosure to prevent prejudicial impacts on its defense and the integrity of the legal process.

Implications of the Motion

The court's decision on Ripple's motion will impact the ongoing litigation and potentially set a precedent for the timing and disclosure of expert materials in future cases. A decision in Ripple's favor could strengthen the rights of defendants to have adequate time to review and challenge expert testimony. Conversely, a decision in favor of the SEC could grant regulatory agencies greater latitude in submitting expert materials at later stages of litigation.

The outcome of this legal battle is closely watched by the cryptocurrency industry, investors, and legal experts, as it has implications for the future regulation of digital assets. The court's decision is expected to provide further guidance on the legal boundaries surrounding the classification, disclosure, and admissibility of expert evidence in complex securities cases.