Are You Ready? The SEC Drops Charges Against Ripple Executives
In a surprising turn of events, the Securities and Exchange Commission (SEC) has announced that it will no longer pursue civil charges against Ripple executives Christian Larsen and Brad Garlinghouse.
What does this mean?
Mutual Agreement Leads to Dismissal
Last Thursday, both parties reached an agreement to dismiss the lawsuit against Larsen and Garlinghouse. The dismissal is “with prejudice,” which means that the lawsuit cannot be brought back in the future. However, the SEC will continue its pursuit of claims against Ripple as outlined in the filing.
“Chris and I have been dealing with unfounded allegations from a regulator with what we perceive as a political agenda for nearly three years,” said Garlinghouse. He further added, “Instead of focusing on pursuing those responsible for illicit activities involving customer funds on offshore exchanges, which were seeking political support, the SEC chose to target individuals they consider to be on the right side of the law.”
Ripple’s Response
Ripple’s chief legal officer, Stuart Alderoty, referred to the SEC’s actions as a “surrender” rather than a settlement. Ripple characterized the decision as a “stunning capitulation.”
In an X post on October 19, Brad Garlinghouse expressed his belief that he and Chris had been unfairly singled out by the SEC. He suggested that there was an aggressive attempt to tarnish their personal reputations and undermine the company they had built over the past decade.
Why Were the Charges Dropped?
The SEC’s decision to drop charges against Garlinghouse and Larsen, just before their scheduled trial in April 2024, raises questions. Katherine Kirkpatrick, Cboe Digital’s chief legal officer, speculates that this move may indicate the SEC’s intention to appeal the court’s decision on XRP’s classification as a security. Typically, such an appeal would come after the trial concludes.
Although the dismissal is a significant victory for Ripple’s executives, it does not bring an end to the SEC’s investigation into Ripple Lab. The SEC still has the option to appeal Judge Torres’s ruling regarding XRP’s programmatic sales and other distributions.
Hot Take: What Does This Mean for Ripple and the Crypto Community?
Are you prepared for this?! The SEC dropping charges against Ripple executives is a surprising development that has left many wondering about the future of Ripple and its impact on the crypto community. While it is a victory for Larsen and Garlinghouse personally, it does not resolve the ongoing investigation into Ripple Lab. The SEC’s decision to dismiss the charges against these individuals may indicate a strategic move to focus on appealing the court’s decision on XRP’s security classification. This turn of events raises important questions about regulatory actions and their implications for cryptocurrencies and their stakeholders.
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