The SEC clears Ripple’s CEO and Executive Chairman of charges in a lawsuit accusing XRP of unregistered securities, ending a three-year legal battle.
- SEC clears Ripple CEO Brad Garlinghouse and Executive Chairman Chris Larsen of charges.
- Lawsuit alleged XRP was unregistered securities.
- Three-year legal battle ends with a US court favoring Ripple.
- Ripple cites SEC’s hostility as a reason for most of its business moving offshore.
The US Securities and Exchange Commission (SEC) has officially cleared the names of two high-profile Ripple executives, Brad Garlinghouse, the CEO, and Chris Larsen, the Executive Chairman, from all charges in the lawsuit that accused XRP of being unregistered securities.
Announced on Thursday, the securities market regulator voted to dismiss the charges with prejudice, marking the end of a three-year legal battle.
SEC vs. Ripple: The End of a Three-Year Legal Battle
The SEC initially brought charges against Ripple, Garlinghouse, and Larsen in late 2020. After a protracted legal struggle, a US court ruled in favor of the blockchain firm in July. Despite an SEC appeal, the court upheld its decision earlier this month.
SEC Drops Charges against Top Ripple Executiveshttps://t.co/T9H1movMSU
— John Morgan (@johnmorganFL) October 20, 2023
Brad Garlinghouse expressed his relief, 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 pursuing criminals stealing customer funds on offshore exchanges courting political favor, the SEC went after us—the good guys—who are building a regulated business in the US.”
SEC’s Actions Pushed the Firm Offshore
Ripple, headquartered in San Francisco, has built a blockchain-based infrastructure for cross-border payments and established partnerships with numerous banks and corporations. However, it cited the SEC’s hostility as the reason behind about 90 percent of its business moving offshore. Additionally, nearly 90 percent of its Q3 2023 hirings were made outside the US.
Chris Larsen added, “Today, we are legally vindicated and personally redeemed in our battle against a troubling attempt to abuse the rules to suffocate crypto in America.”
He continued, “While justice ultimately prevailed, the government’s actions that led to this point raise questions about the origin and motivation of this lawsuit.
It is an abuse by the administrative state that politically connected special interests, with clear and proven conflicts of interest, were able to drag our names through the mud.”
Apart from Ripple, the SEC also levied charges against major crypto industry players Coinbase and Binance. Binance faces serious charges, including co-mingling of customer funds, while Coinbase is accused of listing unregistered securities and operating an illegal exchange.
The SEC’s decision to drop charges against Ripple’s top executives is a significant development in the ongoing legal battle between regulators and the cryptocurrency industry.
It highlights the challenges and complexities surrounding cryptocurrency regulation in the United States and raises questions about the motives behind the initial lawsuit.
Ripple’s assertion that the SEC’s actions led to a substantial portion of its business moving offshore underscores the potential consequences of regulatory overreach in the crypto space. This case serves as a pivotal moment in the industry’s ongoing efforts to establish clear and fair regulatory frameworks.