Landmark SEC Decision Clears Ripple’s Leadership
In a groundbreaking verdict, the U.S. Securities and Exchange Commission (SEC) exonerates Ripple’s CEO, Brad Garlinghouse, and Executive Chairman, Chris Larsen, in the long-standing securities violation case.
A Significant Victory for Ripple
This decision represents a major win for Ripple, putting an end to nearly three years of rigorous regulatory scrutiny.
Resolving the Ongoing Dispute
The SEC’s dismissal of charges marks a turning point in the dispute between the cryptocurrency industry and the regulatory authority. This legal battle has garnered significant attention as it establishes a precedent for defining digital asset securities.
The XRP Verdict
The initial allegations, filed in December 2020, argued that the distribution of the digital asset XRP should have been registered as a security. In July 2023, the court ruled that XRP itself does not qualify as a security, granting Ripple a substantial victory.
Both the SEC and Ripple intend to convene to discuss a briefing schedule for addressing the pending Section 5 violations related to Ripple’s Institutional Sales of XRP. Ripple responded to this development, characterizing the SEC’s initial pursuit as “absurd theatrics” and portraying the outcome as a “surrender.”
Relief and Criticism
Brad Garlinghouse expressed relief after battling what he called “baseless allegations” for nearly three years. He criticized the SEC for seemingly diverting its focus from offshore criminal activities to targeting individuals and a company committed to building a regulated business in the United States.
Vindication and Questions
Meanwhile, Executive Chairman Chris Larsen felt vindicated and highlighted the personal toll the lawsuit took on them. He raised concerns about the SEC’s motivations and perceived it as an abuse of power.
The SEC has voluntarily dismissed the case against #Ripple senior execs. This means they can proceed to appeal the Ripple decision much sooner–otherwise they would have had to wait until the conclusion of that trial in the late spring.— Katherine Kirkpatrick (@kkirkbos) October 19, 2023
Ripple’s Ongoing Mission
Despite this victory, Ripple continues its pursuit of sound crypto regulation in the United States. The company engages in active discussions with policymakers and regulators worldwide to promote responsible innovation in the digital assets industry.
Broader Industry Implications
This legal development resonates beyond Ripple, impacting the wider cryptocurrency industry. Under Chair Gary Gensler’s leadership, the SEC seeks to establish a clear regulatory framework for cryptocurrencies. However, this case underscores the complexity and challenges of classifying digital assets as securities, an issue far from being settled.
Legal Tactics Speculation
Katherine Kirkpatrick, the chief legal officer for Cboe Digital, has speculated that the SEC may have dismissed the cases against the individual defendants as a legal tactic. This strategic move may allow them to appeal the Ripple decision sooner, rather than waiting until the trial’s conclusion in late spring.