SEC Surrenders, Drops Charges Against Ripple Execs

Published by

Qadir AK

October 20, 2023

Are you prepared for this?!

In a recent legal development within the Southern District of New York, the Securities and Exchange Commission (SEC) has made an unexpected announcement. They have decided to no longer pursue civil charges against Ripple executives Christian Larsen and Brad Garlinghouse.

What’s up their sleeve?

Mutual Agreements

In a filing last Thursday, both parties involved have come to an agreement to dismiss the lawsuit against the two executives, and this dismissal is “with prejudice.” This significant term means that the lawsuit cannot resurface in the future. Nevertheless, the SEC will continue its pursuit of claims against Ripple, as detailed 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,” stated Garlinghouse. He 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 Responds

Stuart Alderoty, Ripple’s chief legal officer, described the SEC’s actions not as a settlement but a “surrender.” In a statement, Ripple characterized the SEC’s decision as a “stunning capitulation.”

In a recent X (formerly Twitter) post on October 19, Brad Garlinghouse expressed that he and Chris had been unfairly targeted by the SEC, suggesting an aggressive attempt to tarnish their personal reputations and the decade-old company they had built.

But Why Were the Charges Dropped?

The SEC’s choice to drop charges against Garlinghouse and Larsen, just ahead of their scheduled trial in April 2024, raises questions.

Katherine Kirkpatrick, Cboe Digital’s chief legal officer, has theorized that this move might signal the SEC’s intention to appeal the court’s decision on the classification of XRP as a security. Typically, such an appeal would be pursued after the trial’s conclusion.

The dismissal is a significant victory for Ripple’s executives, yet it doesn’t put an end to the SEC’s investigation into Ripple Lab.

It’s important to note that the SEC might still choose to appeal Judge Torres’s decision regarding XRP’s programmatic sales and other distributions.

Qadir AK

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.