Blockchain Firm Ripple Prevails as SEC Dismisses Claims Against Key Executives

News | October 20, 2023 By:

On October 19, 2023, Ripple, a leading enterprise blockchain and cryptocurrency solutions provider, announced a significant development in their legal battle with the U.S. Securities and Exchange Commission (SEC). The SEC has decided to dismiss all charges against Ripple’s CEO, Brad Garlinghouse, and Executive Chairman, Chris Larsen, with prejudice, marking a major turn of events.

The dismissal of charges against Garlinghouse and Larsen is a notable win for Ripple, as it follows two previous victories. In July 2023, a ruling declared that the digital asset XRP, associated with Ripple, is not considered a security. Additionally, in October, the SEC’s request for an interlocutory appeal was denied.

Brad Garlinghouse expressed his thoughts on the matter, stating, “For nearly three years, Chris and I have been subjected to baseless allegations from a rogue regulator pursuing a political agenda. Instead of focusing on addressing the real issues of criminal activities on offshore exchanges that were seeking political favor, the SEC wrongfully targeted us and our entire team of innovators and entrepreneurs who are building a regulated business in the United States. We eagerly await the day when this chapter is finally closed, now that the SEC has put an end to their absurd theatrics against Chris and me.”

The legal dispute between Ripple and the SEC began on December 22, 2020, when the SEC filed a civil action against Ripple and its executives, alleging that the distribution of XRP since 2013 should have been registered as a security. However, no allegations of fraud or misrepresentation were made. The court ruling in July 2023 determined that XRP is not a security, leading to the SEC’s unsuccessful attempt to appeal the decision. With the recent dismissal of charges against Garlinghouse and Larsen, all charges against these executives have been resolved.

Chris Larsen, the Executive Chairman of Ripple, expressed relief and raised concerns about the lawsuit, stating, “Today, we have been legally vindicated and personally redeemed in our fight against an attempt to exploit the rules to advance a political agenda aimed at stifling cryptocurrency in the United States. It is regrettable that we had to defend ourselves from an ill-conceived attack. The origins and motivations behind this lawsuit raise questions, as it appears to be an abuse of power driven by politically connected special interests with evident conflicts of interest.”

The regulatory uncertainty resulting from the SEC’s actions has had an impact on Ripple’s operations. Currently, a significant portion of Ripple’s business, approximately 90%, takes place outside the United States, with hiring efforts concentrated in major international markets.

While Ripple celebrates its legal vindication, questions arise about the motivations behind the SEC’s lawsuit and the impact of regulatory uncertainty on crypto innovation in the United States. Moving forward, Ripple remains determined to advocate for responsible crypto regulation globally and engage in constructive dialogue with policymakers to foster a thriving and regulated digital assets industry.