Key Takeaways:
- The Securities and Exchange Commission will not pursue its case against Ripple executives.
- The SEC had filed a case against CEO Brad Garlinghouse and Executive Chairman Chris Larsen.
- Ripple has called the development “a stunning capitulation by the government.”
YEREVAN (CoinChapter.com) — The US Securities and Exchange Commission (SEC) is dropping its lawsuit against two executives of Ripple Labs, CEO Brad Garlinghouse and Executive Chairman Chris Larsen.
The regulatory body had charged them with aiding and abetting the company in violating federal securities laws by overseeing the sale of $1.5 million of the XRP token.
Through SEC’s embarrassing capitulation, Garlinghouse, Larsen, and Ripple have achieved their third consecutive victory. A July 2023 ruling established that “XRP is not inherently a security.”
Subsequently, in October, the court rejected the SEC’s plea for an interlocutory appeal.
In a letter addressed to US District Judge Analisa Torres, the SEC notified of its intent to drop the charges.
“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)…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,”
the SEC letter to the judge said.
The regulatory organ also assured the court that they do not intend to proceed with the trial scheduled for next year.
Ripple celebrates SEC surrender
Following the announcement of the dropping of charges against Garlinghouse and Larsen, Ripple was in a celebratory mood. In an official press release, the firm called the development “a stunning capitulation by the government.”
Executive Chairman Chris Larsen called the case against them “a travesty” on the part of the SEC.
“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….While justice ultimately prevailed, the government’s actions that led to this point raise questions about the origin, and motivation of this lawsuit,”
Larsen said.
The founder of Ripple further accused the SEC of conspiring with politically influential special interest groups with evident and substantiated conflicts of interest to tarnish their image.
Meanwhile, CEO Brad Garlinghouse slammed the SEC. He accused it of being in cahoots with Sam Bankman-Fried while targetting them instead. The former crypto mogul is currently undergoing trial for embezzlement in the collapse of his crypto exchange FTX last year.
“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…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,”
Garlinghouse said.
On Dec. 22, 2020, the Securities and Exchange Commission initiated a civil action against Ripple, Larsen, and Garlinghouse. The lawsuit claimed that the distribution of the digital asset XRP, dating back to 2013, should have been registered as a security.
Meanwhile, the price of XRP jumped around 10%, going from $0.4821 to $0.529, according to TradingView charts.
