SEC Drops Charges Against Ripple’s Top Executives in Major Legal Twist
In a surprising turn of events, the United States Securities and Exchange Commission (SEC) chose to dismiss charges against Ripple CEO Brad Garlinghouse and Executive Chairman Chris Larsen, who had been entangled in a legal battle alongside their company over alleged violations of securities laws related to the XRP token.
Ripple responded with strong words, labeling the SEC’s move as a “stunning capitulation” in an official press release.
Stuart Alderoty, Ripple’s Chief Legal Officer, echoed this sentiment on Twitter, characterizing it as a “surrender by the SEC.”
The market reacted positively to the news, with the XRP token witnessing a 5% surge, most of which occurred following the announcement.
This legal saga began in late 2020 when Garlinghouse, Larsen, and Ripple were collectively charged with breaching securities laws in their issuance and distribution of the XRP cryptocurrency.
A significant breakthrough occurred in July when a federal judge ruled that the XRP token “is not necessarily a security on its face.”
Furthermore, the judge declared that Ripple’s sales of XRP on exchanges were not classified as securities offerings, marking a major victory for the cryptocurrency company. Earlier this month, the SEC’s attempt to overturn this ruling before a final judgment next spring was unsuccessful.
Ripple Executive Chairman Chris Larsen expressed his frustration, stating, “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.”
The reasons behind the SEC’s decision to drop charges against Garlinghouse and Larsen individually remain unclear, but it is speculated that the agency’s recent string of legal setbacks against Ripple played a role.
Nevertheless, it is essential to note that the SEC’s broader case against Ripple still stands. This legal showdown, which has been closely monitored for years, is perceived as pivotal in shaping cryptocurrency regulation in the United States.
Numerous prominent figures in the cryptocurrency industry have thrown their support behind Ripple in its battle against the SEC, including major players like Coinbase.
Despite Ripple’s recent legal victories being perceived as a positive signal for the industry, the journey is far from over. In July, the judge presiding over the SEC’s case against Ripple ruled that the sale of XRP tokens to institutional investors constituted illegal, unregistered securities offerings.
Moreover, the SEC is actively embroiled in legal battles against other significant entities in the cryptocurrency space, including Coinbase, Binance, and Tron, underscoring the ongoing regulatory challenges faced by the crypto ecosystem as a whole.
