Ripple seeks documents from 15 offshore exchanges, says it could be "fatal" to SEC charges

Ripple CEO Brad Garlinghouse and co-founder Chris Larsen have filed a motion asking the U.S. Securities and Exchange Commission to investigate Bitfinex's parent company iFinex and 14 other international cryptocurrency exchanges.

The June 2 motion requested documents from exchanges including iFinex, Bitforex, Bithumb, Bitlish, BitMart, AscendEX (formerly Bitmax), Bitrue Singapore, Bitstamp, Coinbene, HitBTC, Huobi Global, Korbit, OKEx, Upbit Singapore, and ZB Network Technology.

The motion’s supporting memorandum states that the letters of request seek assistance from authorities in the Cayman Islands, Hong Kong, South Korea, the United Kingdom, Singapore, the Seychelles and Malta.

The SEC’s amended complaint against Ripple alleges that Garlinghouse and Larsen sold more than 2 billion units of XRP to “public investors” located “around the world,” and the SEC seeks tax refunds from Ripple executives based on the sales.

Ripple executives denied the SEC’s allegations that they violated Section 5 of the Securities Act of 1933, stressing that Section 5 expressly prohibits domestic sales of securities without a registration statement. Garlinghouse and Larsen’s legal representatives countered that their XRP sales were conducted in foreign exchange transactions and therefore were not under the SEC’s jurisdiction:

“To the extent that transactions took place on such foreign trading platforms, both the offers for XRP and the sales of XRP occurred on the books and records of the respective platforms and, therefore, were geographically outside the United States. The SEC’s failure to allege domestic offers and sales should be fatal to its claims.”

Ripple claims that the exchanges and related entities subject to its new motion “are in possession of unique documents and information” regarding Ripple’s legal battle with the SEC, specifically regarding “the process by which the individual defendants allegedly conducted XRP transactions on foreign digital asset trading platforms.”

The SEC amended its complaint against Ripple and the company’s executives in February, accusing them of selling XRP to depress the price of the crypto asset. The complaint also accuses Garlinghouse and Larsen of misleading public investors about the sale of billions of dollars worth of XRP, as Garlinghouse repeatedly claimed that he was “extremely long” XRP during the alleged sales.

The filing comes just days after the SEC’s case against Fipple suffered a major blow when a court rejected the SEC’s request for access to communications between Ripple and its legal counsel.