SEC moves to dismiss lawsuit against Ripple’s Brad Garlinghouse and Chris Larsen

Lawyers representing the SEC announced that they will seek to dismiss all claims against Ripple CEO Brad Garlinghouse and CEO Chris Larsen.

In an October 19 filing with the US District Court for the Southern District of New York, the SEC notified the court that the parties involved in its case against Ripple “stipulated to dismiss with prejudice,” indicating there was no need to set an upcoming date. trial. The filing did not mention that the SEC would drop its civil case against Ripple itself, which was first filed in 2020.

“The SEC and Ripple intend to meet and consult on a potential briefing schedule regarding the outstanding issue in the case — what are the appropriate remedies against Ripple for its Section 5 violations with respect to its institutional sales of XRP — and respectfully request until November,” the filing said. A motion has been filed with the court on September 9, 2023 to propose such a schedule to the court, or, if the parties cannot agree, to request a briefing schedule from the court on a contested basis.”

In response to the filing, Stuart Aldeorte, Ripple’s chief legal officer, said: Named The step is “surrender by the SEC” rather than settlement. Encryption company Released A statement refers to the SEC’s decision as a “stunning surrender.”

“Chris and I […] We have been targeted by the SEC in a relentless effort to destroy us personally and the company that so many people have worked so hard to build for over a decade. He said Garlinghouse in a post dated October 19 (formerly Twitter).

Today was a better day.
Ripple: 3
Seconds: 0

In all seriousness, Chris and I have been targeted (in a case involving no allegations of fraud or misrepresentation) by the SEC in a relentless effort to destroy us personally and the company, which many have worked so hard to build for over… https://t.co/YsQxewFnj9

– Brad Garlinghouse (@bgarlinghouse) October 19, 2023

The SEC’s action on Ripple began in December 2020 when the SEC sued Garlinghouse, Larsen and the company largely over sales of its XRP tokens, which the SEC also claimed were securities. In July, a federal judge ruled that XRP was not a security when sold to retail investors.

Related: The judge denied the SEC’s request to file an appeal against Ripple’s ruling

It is unclear why the SEC chose to drop the charges after nearly three years, with the trial scheduled to begin in April 2024. Katherine Kirkpatrick, chief legal officer at Cboe Digital, forecast That the lawsuit against Garlinghouse and Larsen was dropped could signal that the SEC plans to appeal the court’s ruling on XRP as a security — something it said should have waited until the trial was over.

The SEC has other cases pending against prominent figures in the cryptocurrency space, including former Celisus CEO Alex Mashinsky as well as former FTX CEO Sam Bankman-Fried. Mashinsky’s criminal trial is scheduled to begin in September 2024, while Bankman-Fried’s trial is expected to resume on October 26. The commission has also filed civil lawsuits against cryptocurrency exchanges Binance and Coinbase.

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