The regulator had initially named them as defendants in a case about XRP transactions violating securities laws. However, the agency has now decided to focus solely on the main Ripple case, dropping charges against the CEO and Chairman.
The SEC’s allegations of securities violations against Ripple’s top leaders have been resolved in federal courts after years of legal battles. This brings the overall case closer to a possible conclusion and sets the stage for a potential appeal. This case is significant in the broader conflict between the crypto industry and the SEC, as it addresses the question of what constitutes a security.
SEC Drops Charges Against Ripple Executives
The U.S. Securities and Exchange Commission (SEC) has decided not to pursue allegations that Ripple’s CEO, Brad Garlinghouse, and Executive Chairman, Chris Larsen, aided and abetted the company in violating federal securities laws related to XRP transactions. This move cancels a trial that was scheduled for next year and represents a significant development in the SEC’s ongoing legal battle with Ripple.
According to a filing made on Thursday, both parties have agreed to dismiss the aiding and abetting charges against the two executives with prejudice, meaning these charges cannot be brought up again. However, the SEC will continue to pursue its claims against Ripple itself.
Ripple’s CEO Responds
Brad Garlinghouse, Ripple’s CEO, expressed his perspective on the matter, stating, “For nearly three years, Chris and I have been the subject of baseless allegations from a rogue regulator with a political agenda. Instead of looking for the criminals stealing customer funds on offshore exchanges that were courting political favor, the SEC went after the good guys.”
SEC’s Legal Setbacks in Crypto Cases
The SEC has faced several legal setbacks in its extensive pursuit of cryptocurrency companies accused of violating securities laws. SEC Chair Gary Gensler has argued that most cryptocurrencies should be classified as securities under the agency’s jurisdiction. However, U.S. judges have consistently emphasized that the matter is more complex than a simple categorization.
With a lack of immediate regulatory laws for cryptocurrencies from Congress, these ongoing court battles could become the determining factor in shaping how the U.S. government approaches digital assets.
Meanwhile, Ripple has revealed that nearly 90% of its business activities now take place outside the United States.
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 Bos (@kkirkbos) October 19, 2023
Cboe Digital’s Chief Legal Officer’s Insights
Katherine Kirkpatrick, the Chief Legal Officer at Cboe Digital, shared her perspective on the situation. She suggested that the SEC’s decision to drop the cases against the individuals might be a strategic legal move. According to her, this tactic allows them to expedite the process of appealing the Ripple decision. If they hadn’t taken this route, they would have had to wait until the conclusion of the Ripple trial, which was set for late spring.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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