In a surprising turn of events, Ripple has secured a resounding legal victory. The U.S. Securities and Exchange Commission (SEC) announced the dismissal of all claims against Ripple’s CEO, Brad Garlinghouse, and Executive Chairman, Chris Larsen. The SEC’s decision to drop the charges with prejudice marks a significant capitulation by the government in a protracted legal battle that has spanned several years.
This win marks the third consecutive triumph for Ripple, following a pivotal July 2023 ruling that declared “XRP is not, in and of itself a security.” This was followed by a subsequent October decision that denied the SEC’s request for an interlocutory appeal.
“For nearly three years, Chris and I have been the subject of baseless allegations from a rogue regulator with a political agenda,” said Brad Garlinghouse, Ripple’s CEO.
He added, “Instead of looking for the criminals stealing customer funds on offshore exchanges that were courting political favor, the SEC went after the good guys – along with our entire company of innovators and entrepreneurs – who are building a regulated business based in the U.S. We look forward to the day this chapter is closed once and for all, now that the SEC has dropped the curtain on their absurd theatrics against Chris and me.”
The legal saga began on December 22, 2020, when the SEC filed a civil action against Ripple and its two executives, alleging that distributions of the digital asset XRP should have been registered as securities, dating back to 2013.
Notably, the SEC’s claims did not include allegations of fraud or misrepresentations. This ruling and subsequent appeals were a response to this initial legal action.
Today’s dismissal, which resolved all charges against the Ripple executives, has left the crypto community buzzing.
Chris Larsen, Ripple’s Executive Chairman, expressed his thoughts on the matter, saying, “Today, we are legally vindicated and personally redeemed in our battle against a troubling attempt to abuse the rules in order to advance a political agenda to suffocate crypto in America. It is a travesty that we were forced to defend ourselves from an ill-advised attack that was flawed from the day it was filed.”
Furthermore, Larsen questioned the motivation behind the lawsuit, raising concerns about its origin and the potential political influences at play. The legal battle between Ripple and the SEC has certainly raised eyebrows regarding the relationship between regulators and the crypto industry.
One significant impact of this prolonged legal battle has been the uncertainty it has sown in the crypto sector.
As Ripple fought for its survival, crypto innovation began to drift offshore. Almost 90% of Ripple’s business is now conducted outside the United States, with hiring primarily focused on international markets. In Q3 2023, approximately 90% of new hires at Ripple were not based in the United States, underscoring the damage caused by regulatory turmoil.
Despite these challenges, Ripple said that it remains committed to the pursuit of sound crypto regulation within the United States. The company continues to engage in active dialogue with policymakers and regulators on a global scale, aiming to foster responsible innovation within the digital assets industry.
Ripple’s victory over the SEC has not only vindicated the company but also brought to light the need for clear and well-defined regulatory frameworks in the crypto space. The battle may be over for now, but the larger war for regulatory clarity in the crypto industry continues, with Ripple at the forefront of the struggle.
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