The SEC and Ripple Agree to Dismissal with Prejudice
The U.S. Securities and Exchange Commission (SEC) and Ripple have reached an agreement for a “dismissal with prejudice,” which may prevent the upcoming trial. This decision was communicated to the U.S. District Court for the Southern District of New York by the SEC. It’s important to note that this announcement does not mean that the SEC’s civil case against Ripple has been completely dropped.
The Nature of the Dismissal
The details and implications of this dismissal are still unknown. Both parties will discuss potential remedies for Ripple’s alleged Section 5 violations regarding its Institutional Sales of XRP. If they fail to agree upon a briefing schedule by November 9, 2023, they will seek guidance from the court.
Ripple’s Response and CEO’s Statement
Stuart Aldeorty, Ripple’s chief legal officer, characterized the SEC’s decision as a “surrender.” The company sees it as a significant capitulation. Brad Garlinghouse, Ripple’s CEO, expressed his frustration, claiming that the SEC targeted them in an attempt to tarnish their reputation and undermine their decade-long efforts.
Background: SEC vs. Ripple
In December 2020, the SEC accused Ripple, Garlinghouse, and Larsen of improper sales of XRP tokens. The SEC argued that these tokens were securities but was refuted when a federal judge declared in July that XRP was not a security when sold to retail investors.
Possible Reasons for Dismissal
The crypto community is puzzled by the SEC’s decision to drop the charges after nearly three years. Some speculate that the SEC may be preparing to appeal the court’s ruling on XRP’s security status, which was put on hold until the trial concluded.
SEC’s Broader Engagement with the Crypto Industry
This case is just one part of the SEC’s wider involvement with the crypto world. The regulatory body has ongoing cases against prominent figures like Alex Mashinsky and Sam Bankman-Fried, as well as legal actions against major exchanges such as Binance and Coinbase.
Hot Take: Ripple and SEC Reach Agreement for Dismissal with Prejudice
The recent agreement between Ripple and the SEC for a “dismissal with prejudice” marks a significant development in their ongoing legal battle. While it avoids a scheduled trial, it doesn’t mean that the SEC’s case against Ripple has been dropped entirely. The details of this dismissal are yet to be revealed, and both parties will need to find appropriate remedies for Ripple’s alleged violations. Ripple views the SEC’s decision as a surrender, while the CEO believes it was an attempt to tarnish their reputation. The crypto community is left wondering about the reasons behind this dismissal, with some speculating that an appeal regarding XRP’s security status may be in the works. This case is part of the SEC’s broader engagement with the crypto industry.
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