SEC Drops Securities Lawsuit Against Ripple Executives

Ripple says SEC backing down is “stunning capitulation by the government”

By: Samuel Haig Loading...

SEC Drops Securities Lawsuit Against Ripple Executives

The U.S. Securities and Exchange Commission has dropped its complaint against Ripple chief executive, Brad Garlinghouse, and co-founder, Chris Larsen.

Oct. 19 court filings indicate that both parties volunteered to dismiss the case with prejudice, preventing the SEC from rehashing the charges at a later date. The move also terminates a jury trial scheduled to adjudicate the case next year.

The SEC filed its complaint against the pair in December 2020, accusing Garlinghouse and Larsen of aiding and abetting $1.3B worth of unregistered securities sales since 2013 in the form of XRP tokens.

XRP is up 8% in response to the news, according to CoinGecko.

XRP/USD. Source: CoinGecko.

The dismissal follows a partial win for Ripple in July when U.S. District Judge Analisa Torres Found that Ripple’s XRP sales on public exchanges did not comprise unregistered securities offerings, ruling that “XRP is not in and of itself a security.”

The judge also rejected the SEC’s request to appeal the ruling earlier this month.

Ripple and SEC To Discuss Penalties

However, Torres also found that $728.9M worth of XRP sales to hedge funds and other accredited investors breached the law. Court filings indicate Ripple and the SEC will meet to discuss appropriate penalties for the illegal transactions, before presenting to the court.

In a statement, Ripple described the charges getting dropped as a “landmark SEC surrender” and “stunning capitulation by the government.”

“For nearly three years, Chris and I have been the subject of baseless allegations from a rogue regulator with a political agenda," Garlinghouse said in a statement. "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."