The U.S. securities and exchange commission (SEC) has dropped its charges against Ripple’s top executives Brad Garlinghouse and Chris Larsen over whether they are liable in their involvement in illegal securities sales.
In a filing on 19 October, the agency wrote to Judge Analisa Torres, stating that it was voluntarily withdrawing the case.
“The SEC and Ripple intend to meet and confer on a potential briefing schedule with respect to the pending issue in the case — what remedies are proper against Ripple for its Section 5 violations with respect to its Institutional Sales of XRP — and respectfully request until November 9, 2023 to propose such schedule to the Court or, if the parties cannot agree, to seek a briefing schedule from the Court on a contested basis,” the SEC said in a filing on Thursday.
Ripple’s chief legal officer celebrated the case withdrawal on Twitter. Saying “The SEC made a serious mistake going after Brad & Chris personally – and now, they’ve capitulated, dismissing all charges against our executives,” he wrote on X. “This is not a settlement. This is a surrender by the SEC.”
Ripple’s Long Battle
It all started in December 2020 when the SEC dragged Ripple and the two executives to court on allegations of securities laws violation. Ripple was accused of issuing XRP which the SEC said was a security, while Garlinghouse and Larsen were accused of illegally selling a security and raising $1.3 billion in the process.
Ripple and the two executives have been in court since then, until Judge Torres ruled in July that part of the XRP sales did violate securities laws. The SEC then appealed the case, but has now withdrawn allegations against Garlinghouse and Larsen.
Commenting on the case dismissal, Ripple co-founder Chris Larsen said “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,” the Ripple Executive Chairman said.
“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,” Larsen added.
Following the July ruling, several analysts said the victory wasn’t just for Ripple but for the entire crypto industry as it had implications for the future of other crypto companies as well.
Crypto Industry Winning
The July ruling in favor of Ripple was the first ruling in support of the crypto industry in recent times. It encouraged other crypto companies like Coinbase and Binance to fight back against the SEC which has also taken the two exchanges to court.
This has been followed by another ruling in favor of Grayscale which requested approval from the SEC to convert its Bitcoin trust to a Bitcoin spot ETF. The SEC however turned down the request and Grayscale filed for an appeal which it won.
The SEC decided not to appeal the ruling this time, something analysts say is a big moment for crypto. Because of the Grayscale ruling, both the judiciary and the lawmakers are now strongly in support of a Bitcoin spot ETF.
SEC chair Gary Gensler on Thursday said the agency was working on multiple applications at the same time, and analysts believe the agency may approve multiple applications at the same time.
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