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The SEC has dropped its charges against Ripple executives Brad Garlinghouse and Chris Larsen as the price of XRP records huge gains.
The United States Securities and Exchange Commission (SEC) has dropped its charges against executives from Ripple Labs – Chris Larsen (chairman and co-founder) and Brad Garlinghouse (CEO).
“Plaintiff, SEC, respectfully notified the court of the stipulated dismissal of the SEC’s pending claims against defendants Christian Larsen and Bradley Garlinghouse,” a recent court briefing read.
Notably, the court made this known in a briefing by pro-XRP lawyer James K. Filan yesterday.
#XRPCommunity #SECGov v. #Ripple #XRP BREAKING: CASE DISMISSED AGAINST BRAD GARLINGHOUSE AND CHRIS LARSEN pic.twitter.com/BYTe9152jM
— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) October 19, 2023
Ripple CLO Says the SEC Has Surrendered
Expectedly, the development stirred reactions from XRP community members, with Ripple CLO Stuart Alderoty commenting on the SEC’s decision to dismiss the case against Larsen and Garlinghouse.
Commenting, Alderoty asserted that the SEC made a mistake going after the company’s execs, which has led to its capitulation. Interestingly, the Ripple Chief Legal Officer referred to the move as a surrender by the SEC and not a settlement.
“This is not a Settlement. This is a Surrender by the SEC.”
The SEC made a serious mistake going after Brad & Chris personally – and now, they’ve capitulated, dismissing all charges against our executives. This is not a settlement. This is a surrender by the SEC. https://t.co/TOsG64ZdEx
— Stuart Alderoty (@s_alderoty) October 19, 2023
Besides Alderoty, other XRP faithful also reacted to the news. A commentator suggested that the regulator dropped the charges because it did not want to lose for the third time in a row.
Recall that on July 13, the court ruled that most XRP transactions the SEC alleges to be securities are not. The court also denied the SEC’s request to certify an interlocutory appeal. Notably, the court’s ruling on the April 2024 trial could have been another critical ruling in the case.
XRP Surges Over 6% in 24 Hours
The dismissal of the case marks a major win for Ripple, prompting the price of XRP to skyrocket tremendously. According to data from CoinGecko, the price of XRP spiked over 10% in the wake of the news.
Interestingly, XRP spiked to a 24-hour high of $0.528 from a low of $0.477. At press time, the coin is changing hands at $0.512, up 6.3% over the past 24 hours.
It bears mentioning that the SEC initially alleged that Garlinghouse and Larsen aided and abetted Ripple Labs in violating securities laws via the sale of XRP to institutional investors.
As reported, the court ruled on July 13 that Ripple’s institutional sales constitute investment contracts, while sales to retail investors did not. Consequently, the court scheduled the SEC’s case against Ripple execs for a jury trial set for April 2024.
Potential Next Move
With the SEC dismissing charges against Garlinghouse and Larsen, there will not be a trial in April 2024. The SEC will be engaging Ripple to determine the appropriate remedies concerning the company’s violation of securities laws via its institutional sales.
After the remedies stage, the SEC could proceed to file a full appeal of the case, challenging the court’s ruling on programmatic sales and other distributions.
Furthermore, the SEC could settle with Ripple and end the multi-year legal battle. So far, the regulator has not signaled plans for a settlement.
Its sights seem to be set on appealing the court’s July 13 decision, which declared programmatic sales and other distributions of XRP as non-securities.