In an effort to give the cryptocurrency company another win in the long-running lawsuit against it, the U.S. Securities and Exchange Commission (SEC) has decided not to pursue allegations that Ripple’s CEO Brad Garlinghouse and Executive Chairman Chris Larsen helped and encouraged the company to violate federal securities laws in its XRP transactions. This decision also moves the regulator closer to appealing a federal judge’s decision in the case. The trial was originally scheduled for next year.
The parties decided to voluntarily dismiss the allegations of aiding and abetting against the two executives with prejudice, which means they cannot be filed again, according to a document made on Thursday afternoon.According to the filing, the SEC will keep pursuing its allegations against Ripple.
“For nearly three years, Chris and I have been the subject of baseless allegations from a rogue regulator with a political agenda,” said Garlinghouse, in a statement. “Instead of looking for the criminals stealing customer funds on offshore exchanges that were courting political favor, the SEC went after the good guys.”
When the judge presiding over the case decided in July that Ripple had not broken any federal securities laws by making XRP available to ordinary investors through exchanges, the company achieved a significant, if only partial, victory.Judge Analisa Torres declared in the same decision that the business had sold XRP directly to institutional investors in violation of federal securities legislation.
According to Thursday’s filing, the SEC and Ripple will continue their conversations in this second section.Similarly, the institutional sales, which were scheduled for trial in April of next year, are connected to the charges that were dismissed.
“The SEC and Ripple intend to meet and confer on a potential briefing schedule with respect to the pending issue in the case – what remedies are proper against Ripple for its Section 5 violations with respect to its Institutional Sales of XRP,” the filing said.
A representative for the SEC declined to comment.The filing was called a “surrender” and the first pursuit was called “absurd theatrics” in a press statement from Ripple.With the news, XRP’s price increased by almost 4.1% to $0.51.The SEC’s attempt to appeal its court defeat in the Ripple case while the other matters were still pending trial was turned down earlier this month.In its extensive investigation of cryptocurrency companies it claims are breaking securities laws, the SEC has encountered numerous legal setbacks.Virtually all cryptocurrencies should be regarded as securities and fall under the purview of agency control, according to SEC Chair Gary Gensler, but US judges have consistently stated that this is not the case.
If Congress doesn’t pass any crypto-related regulatory legislation soon, the outcomes of these legal disputes might determine how the government in the United States handles digital assets.Meanwhile, Ripple reported that about 90% of its transactions is being conducted outside of the United States.
In a post on X (formerly Twitter), Cboe Digital’s chief legal officer, Katherine Kirkpatrick, hinted that the agency might have abandoned the cases against the individuals as a legal ploy.
“This means they can proceed to appeal the Ripple decision much sooner –otherwise they would have had to wait until the conclusion of that trial in the late spring,” she wrote.