On October 23, 2023, US District Judge Analisa Torres made a landmark decision by signing an order that officially dismissed the US Securities and Exchange Commission’s (SEC) case against Ripple executives Brad Garlinghouse and Chris Larsen. This dismissal not only brought an end to the claims made by the SEC against Garlinghouse and Larsen, but it was also marked with prejudice, ensuring that the SEC cannot bring similar claims against them in the future regarding the same matter.
This dismissal order, according to Fred Rispoli, a pro-XRP attorney and senior managing partner at Hodl Law, was very precise in its scope. It specifically mentioned “Institutional Sales” of XRP by the Ripple executives and did not include other categories such as “Programmatic Sales” and “Other Distributions.” Rispoli believes this was a strategic decision, as it grants protection to Garlinghouse and Larsen only for institutional sales. If the SEC were to appeal and reverse the court’s decision on programmatic sales and other distributions, the executives could potentially face legal consequences once again.
Rispoli suggested that it might have been more beneficial for Garlinghouse and Larsen if they had demanded a dismissal of all claims, rather than limiting it to institutional sales only. He argued that if the SEC were to win on its appeal and overturn the ruling on the other sales categories, the SEC could still pursue legal action against Garlinghouse and Larsen.
Considering these discussions, there is speculation about possible behind-the-scenes negotiations or agreements that may have influenced the judge’s decision. Rispoli agreed that only if there is an appeal by the SEC, not including the other two categories in the dismissal could become a problem.
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The litigation in question began on December 22, 2020, when the SEC filed a complaint alleging that Garlinghouse and Larsen had unlawfully funneled finances into Ripple through the sale of unregistered XRP, specifically targeting institutional investors. Ripple’s XRP sales activities were divided into three categories: institutional, programmatic, and other distributions.
In a significant ruling, Judge Torres determined that only the institutional sales violated the law, absolving programmatic sales and other distributions from being deemed unlawful. This ruling initially paved the way for a trial focusing on institutional sales, but with the SEC’s recent decision to dismiss its charges, that scheduled trial is no longer happening.
The crypto and legal communities are now speculating about the SEC’s perspective and potential upcoming actions. Many legal analysts, including Rispoli, believe that a settlement between the SEC and Ripple might be on the horizon. However, it is important to note that the SEC still has the option to appeal after the final ruling.
As of now, XRP is currently trading at $0.5426.
In conclusion, the dismissal of the SEC’s case against Ripple executives Brad Garlinghouse and Chris Larsen marks a significant victory for them. However, the dismissal only applies to institutional sales of XRP, leaving the executives vulnerable to legal action if the SEC’s appeal succeeds in reversing the court’s decision on other sales categories. The possibility of a settlement between the SEC and Ripple is being discussed, but the final ruling and any potential appeal will still play a crucial role in shaping the future of this legal battle.
