In a letter addressed to Judge Analisa Torres, the SEC informed that it was dropping its lawsuit against Ripple (XRP). Relieved by their victory, the company’s executives used strong words against the government agency.
The SEC drops its case against Ripple
Last July, Ripple (XRP) won a major victory against the Securities and Exchange Commission (SEC), obtaining confirmation in court that its token was not a security in secondary market trading.
Nevertheless, the trial was to continue into 2024, in particular to determine whether the initial sale of XRP to the first institutional investors had violated securities laws.
But while the dispute between the two protagonists had been going on since December 22, 2020, on Thursday the SEC sent a letter to Analisa Torres, the U.S. District Judge for the Southern District of New York in charge of the case, informing her of the “stipulated dismissal” of the ongoing proceedings. This means that the lawsuits have been dropped.
Stuart Alderoty, Ripple’s General Counsel, called the SEC’s move a surrender, believing that the government agency had made a serious mistake in going after the company’s executives:
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
Executives relieved but bitter
In a press release, Ripple executives Brad Garlinghouse and Chris Larsen did not mince their words against the SEC, the former calling the latter a “rogue regulator”, alluding to FTX:
“For nearly three years, Chris and I have been subjected to baseless allegations by a rogue regulator with a political agenda. Instead of going after the criminals who stole client funds on offshore exchanges and sought political favors, the SEC has gone after the good guys […] who are building regulated U.S.-based businesses. “
For his part, Chris Larsen also believes that this SEC attack served a political agenda, which he deems an “abuse by the administrative state”:
“It’s a travesty that we were forced to defend ourselves against an ill-advised decision. An attack that was flawed from the day it was filed. Even if justice ultimately prevailed, the actions of the government that led to this finding raise questions about the origin and motivation of this lawsuit. “
From now on, the two parties are to hold talks to settle the final outstanding details. For its part, the SEC has not specified the reasons behind this curious turn of events. While Gary Gensler, SEC Chairman, was recently reprimanded by Congress for his policy towards crypto-currencies, it is likely that this event may have tipped the balance.
Meanwhile, the XRP has gained 6.3% over the last 24 hours at the time of writing, and is now trading at just over $0.51 each.
