- The SEC has dropped claims against Ripple’s CEOs, canceling a scheduled trial and providing a legal win for the company in its ongoing battle with the agency
- Ripple hailed the decision as a “stunning capitulation” and criticized the SEC’s “abuse” of power
- Ripple will continue discussions with the SEC regarding allegations of securities law violations in institutional XRP sales in 2013
The Securities and Exchange Commission (SEC) has dropped its claims that Ripple’s CEO Brad Garlinghouse and Executive Chairman Chris Larsen assisted the company in violating federal securities laws through XRP transactions. This move cancels a trial that was set for next year, giving Ripple another legal victory in its ongoing battle with the agency. All parties agreed to permanently dismiss the aiding and abetting charges against the two executives, which cannot be refiled, although the SEC will continue its claims against Ripple itself.
Ripple CEOs Welcome “Stunning Capitulation”
Ripple sent out a press release after the SEC agreed to drop the charges against the pair, calling the decision a “stunning capitulation by the government.” The charges date back to December 2020 when the SEC filed a civil action against Ripple, Larsen and Garlinghouse , alleging that beginning in 2013, distributions of the digital asset XRP should have been registered as a security. In July this year, the court delivered a victory to Ripple, ruling that XRP is not a security and lost its appeal two weeks ago.
In the press release, Larsen hit out at what he perceived as abuse of power by 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. 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 that the lawsuit represented “an abuse by the administrative state” that featured “clear and proven conflicts of interest,” with Ripple having a dig at the state of US crypto legislation at the same time.
While Ripple may have secured two important victories, the company is still in discussions with the SEC over the allegations that securities laws were violated over institutional sales of XRP in 2013.