SEC requests to extend deadline for Ripple discovery case after two years of investigation

• Six months into the lawsuit and after two and a half years of investigation, the United States Securities & Exchange Commission has requested an extension for discovery in the SEC v. Ripple case.
• The agency has asked the court to extend the deadlines for discovery for two months. 
• Attorneys familiar with the case indicate that the regulator took enforcement action before completing its initial investigation. 

Six months after the lawsuit was filed by the United States Securities & Exchange Commission (SEC) against Ripple Labs, the agency has requested that the court extend the deadlines for discovery by 60 days.

SEC requires another two months for investigation

On June 2, the US SEC asked Judge Analisa Torres to extend the deadlines for both fact and expert discovery by 60 days. The securities regulator argued that the extension would unlikely delay any trial since two of the three defendants have moved to dismiss motions that will not be briefed until June 4. 

The fact discovery deadline was initially set on July 2, while expert discovery is scheduled to close on August 16. 

The agency explained that certain documents requested by the SEC were not handed over by Ripple Labs and that the blockchain firm has had “difficulty producing responsive documents of its current and former employees.”

As described in the filing, the defendants, Ripple and its executives, Chris Larsen and Brad Garlinghouse, did not agree to the extension at first, stating that the securities regulator has had sufficient time to investigate the matter prior to filing the $1.3 billion lawsuit against the firm behind the XRP cryptocurrency.

Although it is common that parties ask for extensions of discovery, attorney James Filan highlighted:

Here, however, it is a government agency asking for the extension after a 2 ½ [year] formal government investigation. That’s a 2 ½ year head start on the case using all the tools and resources the US government has at its disposal.

According to Filan, he believes that the enforcement action was filed before the investigation was completed. He further stated that Judge Sarah Netburn would not be impressed.

Ripple and SEC hopes to avoid burdening the Court

In another discovery dispute, the SEC’s previous motion, filed under seal, has been denied as moot based on representations made by the parties in letters that were also not accessible to the public.

While the two parties worked out this discovery dispute, another discussion has arisen where Ripple’s motion to seal certain exhibits was denied without prejudice. The Court told the SEC and Ripple Labs to meet and to work out the discovery dispute, to which attorney Filan commented:

Judge Netburn is losing patience with the fighting.

The defendant and plaintiff filed a joint motion to extend the deadline to June 9, of the redacted portions of the SEC’s letter and 15 exhibits the agency filed under seal in support. Ripple stated that the two parties continue to meet to discuss potential redactions and hope to “avoid burdening the Court with unnecessary disputes.”

---