Lawyers representing the US Securities and Exchange Commission have announced that they will seek to dismiss all claims against Ripple CEO Brad Garlinghouse and executive chairman Chris Larsen.
In an Oct. 19 filing in U.S. District Court for the Southern District of New York, the SEC informed the court that the parties involved in its case against Ripple “preached the dismissal with prejudice,” suggesting there was no need to plan for a future one. . an attempt The filing did not state that the SEC was dropping its civil case against Ripple itself, first filed in 2020.
“The SEC and Ripple intend to meet and confer on a possible briefing schedule regarding the pending matter in the case – what remedies are appropriate against Ripple for its Section 5 violations related to its Institutional Sales of XRP – and respectfully request until November 9, 2023 for propose such a schedule to the Court or, if the parties cannot agree, seek an information schedule from the Court on a contested basis,” the filing said.
In response to the filing, Ripple chief legal officer Stuart Aldeorty called the move “capitulation by the SEC” rather than a settlement. The crypto firm released a statement referring to the SEC decision as a “stunning capitulation”.
“Chris and I (…) have been targeted by the SEC in a ruthless attempt to personally ruin us and the company we’ve worked so hard to build for over a decade,” said Garlinghouse in a post dated 19 October X (formerly Twitter).
Today was an even better day.
Ripple: 3
SEC: 0In all seriousness, Chris and I (in a case involving no claims of fraud or misrepresentations) were targeted by the SEC in a ruthless attempt to personally ruin us and the company we worked so hard to build for over … https:// t.co /YsQxewFnj9
– Brad Garlinghouse (@bgarlinghouse) October 19, 2023
The SEC’s actions on Ripple began in December 2020 when the commission filed a lawsuit against Garlinghouse, Larsen and the company mainly for selling its XRP tokens, which the commission also claimed were securities. In July, a federal judge ruled that XRP was not a security when sold to retail investors.
Related: Judge rejects SEC’s motion to file appeal against Ripple ruling
It is unclear why the SEC chose to drop the charges after nearly three years, with a trial scheduled to begin in April 2024. Katherine Kirkpatrick, Cboe Digital’s chief legal officer, speculated that dropping the lawsuit against Garlinghouse and Larsen could suggest that the SEC plans to appeal the court’s ruling on XRP as a security — something she said should wait until the end of the trial.
The SEC has other pending cases against high-profile figures in the crypto space including former Celsius 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 also filed civil lawsuits against crypto exchanges Binance and Coinbase.
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