Published
6 months ago on
October 20, 2023
Table of Contents
- SEC Retreats in Ripple Case
- Ripple Appears to be Receiving The Right Outcomes
- Caution is Still To Be Exercised
The US Securities and Exchange Commission (SEC) has dropped all charges against Ripple’s CEO, Brad Garlinghouse and co-founder Chris Larson.
The US SEC, in its relentless pursuit against Ripple, $XRP, Brad Garlinghouse, and Chris Larson, dropped the claims against the two executives. In its infamous case against Ripple Labs, the SEC alleges that two of its executives violated US securities laws.
— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) October 19, 2023
SEC Retreats in Ripple Case
In a letter to Judge Analisa Torres, the SEC made the following statements:
“Plaintiff Securities and Exchange Commission (“SEC”) respectfully notifies the Court of the stipulated dismissal of the SEC’s pending claims against Defendants Christian Larsen and Bradley Garlinghouse (“Individual Defendants”).”
The SEC further stated that the claim alleging Garlinghouse and Larson violated securities laws with respect to the institutional sale of XRP was also to be dismissed.
“This Court’s July 13, 2023 Order (ECF No. 874) (“Order”) set for trial the SEC’s claim that the Individual Defendants aided and abetted Ripple’s violations of Section 5 of the Securities Act of 1933 with Ripple’s “Institutional Sales” of XRP. Order at 30-34; see also ECF Nos. 884, 917. Pursuant to Rule 41(a)(1)(A)(ii) of the Federal Rules of Civil Procedure, the parties have stipulated to the dismissal with prejudice of this claim. This voluntary dismissal obviates the need for the scheduled trial on this claim and moots the October 3, 2023 scheduling order (ECF No. 917).”
Ripple Appears to be Receiving The Right Outcomes
In December 2020, the SEC filed a lawsuit accusing Ripple of illegally raising over $1.3 billion through an unregistered securities offering by selling $XRP.
After long and drawn-out proceedings, Ripple received a partial victory in the matter in July. Judge Torres ruled that the sale of XRP on public exchange did not constitute an unregistered securities offering and further rejected the SEC’s request to appeal the ruling.
In a press release, which described the filing as a “surrender” by the SEC, CEO Brad Garlinghouse commented:
“For nearly three years, Chris and I have been the subject of baseless allegations from a rogue regulator with a political agenda.”
“Instead of looking for the criminals stealing customer funds on offshore exchanges that were courting political favor, the SEC went after the good guys - along with our entire company of innovators and entrepreneurs - who are building a regulated business based in the US We look forward to the day this chapter is closed once and for all, now that the SEC has dropped the curtain on their absurd theatrics against Chris and me.”
Executive Chairman and Co-founder Chris Larsen commented on the magnitude of overcoming this “ill-advised attack.” He noted,
“Today, we are legally vindicated and personally redeemed in our battle against a troubling attempt to abuse the rules in order to advance a political agenda to suffocate crypto in America. It is a travesty that we were forced to defend ourselves from an ill-advised attack that was flawed from the day it was filed.”
“While justice ultimately prevailed, the government’s actions that led to this point raise questions about the origin, and motivation of this lawsuit. It is an abuse by the administrative state that politically connected special interests, with clear and proven conflicts of interest, were able to drag our names through the mud in an attempt to ruin us personally and destroy a company so many have worked so hard, for so long to build.”
Caution is Still To Be Exercised
The chief legal officer for Cboe Digital, Kathrine Kirkpatrick, took to X (formerly Twitter) to say the SEC may have dropped the charges against Garlinghouse and Larsen as a legal tactic.
The SEC has voluntarily dismissed the case against #Ripple senior execs. This means they can proceed to appeal the Ripple decision much sooner--otherwise they would have had to wait until the conclusion of that trial in the late spring.
— Katherine Kirkpatrick (@kkirkbos) October 19, 2023
She explained:
“This means they can proceed to appeal the Ripple decision much sooner – otherwise they would have had to wait until the conclusion of that trial in the late spring.”
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