In a significant development, Ripple has announced that the US Securities and Exchange Commission (SEC) has dismissed all charges against its CEO, Brad Garlinghouse, and Executive Chairman, Chris Larsen. The dismissal marks a major setback for the SEC and represents the third consecutive victory for Garlinghouse, Larsen, and Ripple in their legal battle against the government agency.
The first victory came in July 2023 when a judge ruled that XRP, Ripple’s native cryptocurrency, is not considered a security. This judgment was a crucial win for Ripple as it established that XRP is distinct from traditional securities and therefore outside the purview of the SEC. The second victory came in October when the SEC’s plea for an interlocutory appeal was rejected, further bolstering Ripple’s position.
Reflecting on the prolonged legal battle, Ripple CEO Brad Garlinghouse expressed relief and frustration: “For nearly three years, Chris and I have been the subject of baseless allegations from a rogue regulator with a political agenda. 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.”
Ripple’s Chief Legal Officer, Stuart Alderoty, also weighed in on the decision, stating that the SEC had made a serious mistake by targeting Garlinghouse and Larsen personally and that the agency’s dismissal of charges can be seen as a surrender.
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The dismissal of charges against Garlinghouse and Larsen has led to speculation about the future of the case between Ripple and the SEC. Eleanor Terrett, a FOX Business journalist, highlighted the implications of the dismissal, noting that the trial initially scheduled for April next year has been effectively canceled. However, Terrett also pointed out that further litigation is anticipated in the penalty phase concerning Ripple’s institutional sales of over $700 million. Legal experts predict a significant tussle between Ripple and the SEC as they negotiate the penalty, with the SEC likely to insist on a substantial sum, partly for symbolic victory.
Although the charges against Garlinghouse and Larsen have been dropped, the SEC retains the option to appeal the judge’s decision regarding the “programmatic sales” and “other distributions” of XRP. This potential appeal could introduce a twist in the legal saga, creating further uncertainty for Ripple.
Within the XRP community, some legal experts are deliberating whether the recent dismissal of charges was a strategic move by the SEC to expedite the appeal process against the summary judgment. Bill Morgan, a lawyer affiliated with the XRP community, reiterated attorney Jeremy Hogan’s prediction from early October, suggesting that settling with individual defendants would allow the SEC to reach an appellate court faster and bypass a challenging case.
The next steps in the case will involve Ripple and the SEC conferring on a potential briefing schedule concerning the remedies for Ripple’s violations related to XRP’s institutional sales. Both parties are expected to present this proposed schedule to Judge Torres by November 9.
While Ripple’s recent victories have strengthened its position in the legal battle with the SEC, the journey is far from over. The upcoming penalty negotiations and the possibility of an SEC appeal on specific points will play a crucial role in shaping the future of this high-profile case.
As of now, the price of XRP has risen by 6.3% in the last 24 hours, reaching $0.5137.
In conclusion, the dismissal of charges against Ripple’s CEO and Executive Chairman is a significant setback for the SEC. It represents another victory for Ripple in its legal battle against the government agency. However, the case is far from resolved, as future penalty negotiations and the possibility of an SEC appeal on specific points will determine the final outcome. The outcome of this high-profile case will have implications not only for Ripple but also for the broader cryptocurrency industry.
