The SEC Drops Charges Against Ripple CEO and Chairman
The United States Securities and Exchange Commission (SEC) has voluntarily dismissed charges against Ripple CEO Brad Garlinghouse and Executive Chairman Chris Larsen, as well as the company itself, for allegedly violating securities laws with the sale of the XRP token. The decision by the SEC to drop charges was described by Ripple as a “stunning capitulation” in a press release, while Ripple Chief Legal Officer Stuart Alderoty called it “a surrender by the SEC” in a tweet. Following the news, the price of XRP increased by about 5%.
Background of the Case
Garlinghouse, Larsen, and Ripple were initially charged in late 2020 for allegedly violating securities laws through the offering and distribution of XRP. However, in July of this year, a federal judge ruled that XRP is not necessarily a security. The SEC attempted to have this ruling overturned but failed. Ripple Executive Chairman Chris Larsen criticized the lawsuit, stating that it raised questions about its origin and motivation.
Reasons for Dropping Charges
The specific reasons behind the SEC’s decision to drop charges against Garlinghouse and Larsen are unclear. However, it may be influenced by the agency’s recent string of court losses against Ripple. The SEC has not provided any comment on its strategy regarding this decision.
Implications for Ripple’s Legal Battle
Although charges against Garlinghouse and Larsen have been dropped, the SEC is still pursuing its case against Ripple as a whole. This case is seen as a significant legal showdown that could shape crypto regulation in the United States. Major players in the crypto industry, including Coinbase, have supported Ripple’s legal fight against the SEC. Despite recent legal victories for Ripple, the company and the broader crypto ecosystem still face challenges.
Crypto Market’s Response
While Ripple’s legal successes have encouraged the crypto industry, there is still uncertainty. In July, when Ripple received a favorable ruling, the crypto market gained $73.5 billion in value. However, the judge overseeing the SEC’s case against Ripple determined that the sale of XRP tokens to institutional investors constituted illegally unregistered securities offerings. Additionally, the SEC is involved in lawsuits against other prominent crypto entities such as Coinbase, Binance, and Tron.
Hot Take: Ripple’s Legal Battle Continues
The SEC’s decision to drop charges against Ripple CEO Brad Garlinghouse and Executive Chairman Chris Larsen is a significant development in their legal battle. However, it does not mark the end of Ripple’s challenges. The SEC is still pursuing its case against Ripple as a whole, and the outcome will have far-reaching implications for crypto regulation in the United States. While Ripple’s recent victories have boosted confidence in the industry, there are still hurdles to overcome. The crypto market remains closely watching this ongoing legal saga.
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