The allegations against Ripple co-founders Brad Garlinghouse and Chris Larsen have been dropped. Ripple and the SEC need to come to terms on how to handle infractions involving the selling of XRP to institutions.
Two key Ripple executives had charges dropped against them by the U.S. Securities and Exchange Commission (SEC), as announced in a press release on October 19.
In the past, the SEC has filed charges against Brad Garlinghouse, CEO of Ripple, and Chris Larsen, co-founder and executive chair of Ripple, for allegedly facilitating the company’s sales of XRP to institutional investors.
In a press release, Garlinghouse said: Nearly three years have passed since a rogue regulator first made false accusations against Chris and myself. The SEC targeted the right people instead of the wrong ones, and our whole firm of inventors and entrepreneurs was shut down as a result.
Meanwhile, Larsen characterized the matter as a “abuse by the administrative state” and a “attempt to ruin us personally” as well as the firm.
The SEC did not issue a statement but instead explained its position in a court filing on October 19. The SEC said in one document that the claims were “dismissed in their entirety, without prejudice, and without costs or fees to either party.”
An April trial was avoided thanks to the agency’s agreed and voluntary dismissal, as stated in a separate document.
The SEC’s case against Ripple, which involves the acts of Ripple as a business rather than simply its individual members, is not entirely resolved despite the dismissal.
On or around July 13, a court found that Ripple did not break any laws with its programmatic sales of XRP or other distributions. On July 19, Ripple issued its own statement reiterating the win and clarifying that XRP sales on exchanges, executive XRP sales, and XRP transactions do not constitute securities.
The SEC began trying to appeal Ripple’s first victory in August on its programmatic sales of XRP. On October 3, however, the court ruled against the SEC’s request for an appeal, thereby ending that aspect of the case.
Ripple’s sales to institutional investors were deemed securities in the judge’s first verdict. According to the most recent filing, Ripple and the SEC still need to identify the proper sanctions for breaches linked to those institutional transactions.
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