Ripple, the company behind the XRP cryptocurrency, announced today that its CEO Brad Garlinghouse and Executive Chairman Chris Larsen were cleared of all claims brought against them by the U.S. Securities and Exchange Commission (SEC). The SEC had accused the two executives of aiding and abetting $1.3 billion worth of unregistered securities sales in the form of XRP tokens since 2013.
The announcement comes after a series of legal victories for Ripple in its ongoing battle with the SEC. In July 2023, U.S. District Judge Analisa Torres ruled that
“XRP is not, in and of itself, a security” and rejected the SEC’s argument that XRP was an investment contract subject to federal securities laws. The judge also denied the SEC’s request to appeal the ruling earlier this month.
Case dismissed without prejudice
According to court filings, both parties agreed to dismiss the case with prejudice, meaning that the SEC cannot refile the charges at a later date. The dismissal also terminates a jury trial that was scheduled to take place next year.
However, the SEC’s case against Ripple itself is not over yet. The regulator still claims that Ripple violated Section 5 of the Securities Act by selling $728.9 million worth of XRP to hedge funds and other accredited investors without registering them as securities. The SEC and Ripple will meet to discuss appropriate penalties for these transactions, before presenting them to the court.
A landmark SEC surrender
Ripple described the charges getting dropped as a “landmark SEC surrender” and a “stunning capitulation by the government”. Garlinghouse said in a statement:
“For nearly three years, Chris and I have been the subject of baseless allegations from a rogue regulator with a political agenda. 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 news was welcomed by the XRP community, as the price of the cryptocurrency surged by 8% in response to the announcement. XRP is currently the sixth-largest cryptocurrency by market capitalization, with a value of $0.52 as of Oct. 20, 2023. Many analysts believe that XRP has a bright future ahead, as it offers fast, cheap, and scalable cross-border payments solutions for various industries.