Ripple CEO and Chairman Cleared of SEC Allegations
In a significant victory for Ripple, the U.S. Securities and Exchange Commission (SEC) has dismissed all allegations against Ripple’s CEO, Brad Garlinghouse, and Executive Chairman, Chris Larsen. This decision comes after almost three years of intense regulatory scrutiny and marks a pivotal moment in the ongoing dispute between the cryptocurrency industry and the SEC.
Ripple’s Legal Battle Triumph
The allegations against Garlinghouse and Larsen, which were filed in December 2020, claimed that the distribution of XRP should have been registered as a security. However, a court ruling in July 2023 declared that XRP itself is not a security, giving Ripple a significant victory.
The SEC and Ripple plan to meet and discuss potential remedies for Ripple’s Section 5 violations related to its Institutional Sales of XRP. Ripple has described the SEC’s pursuit as “absurd theatrics” and characterized this development as a “surrender.”
Relief for Brad Garlinghouse and Chris Larsen
After nearly three years of battling baseless allegations, Brad Garlinghouse expressed relief at the SEC’s decision. He criticized the SEC for diverting attention from criminal activities on offshore exchanges to target individuals and a company working towards building a regulated business within the United States.
Similarly, Chris Larsen expressed his sense of vindication and raised questions about the origin and motivation behind the SEC’s pursuit, highlighting what he perceived as an abuse of power.
Implications for the Crypto Industry
This legal victory has broader implications for both Ripple and the cryptocurrency industry as a whole. The SEC, under Chair Gary Gensler’s leadership, is aiming to establish a clear regulatory framework for cryptocurrencies. However, classifying digital assets as securities remains a complex and unsettled matter.
Katherine Kirkpatrick, the chief legal officer for Cboe Digital, has speculated that the SEC’s dismissal of the cases against the individual defendants may be a legal tactic to allow them to appeal the Ripple decision sooner.
Hot Take: Ripple Clears Hurdle in SEC Legal Battle
Ripple’s CEO and Executive Chairman have been cleared of all allegations by the SEC, marking a significant victory for the company after years of regulatory scrutiny. The court ruling in July 2023 that XRP is not a security gave Ripple an advantage in the ongoing legal battle. Brad Garlinghouse expressed relief, criticizing the SEC for targeting individuals and diverting attention from criminal activities. Chris Larsen also felt vindicated and questioned the motivations behind the SEC’s pursuit. This decision has implications for the broader crypto industry as it highlights the challenges in classifying digital assets as securities. The dismissal of cases against individual defendants may be a legal tactic by the SEC.
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