SEC Drops Lawsuit Against Ripple Executives, All Charges Dismissed — Ripple Calls It 'a Surrender by SEC'

The U.S. Securities and Exchange Commission (SEC) has dropped all charges against Ripple’s executives, CEO Brad Garlinghouse and co-founder Chris Larsen. “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,” said Ripple’s chief legal officer.

SEC Lawsuit Against Ripple’s Executives Dismissed

The U.S. Securities and Exchange Commission (SEC) has dropped its lawsuit against Ripple CEO Brad Garlinghouse and co-founder Chris Larsen. In a filing with the U.S. District Court for the Southern District of New York, the attorneys for the SEC, Ripple, Garlinghouse, and Larsen stated:

It is now stipulated and agreed … that the claims alleged by Plaintiff Securities and Exchange Commission against Defendants Bradley Garlinghouse and Christian A. Larsen … are hereby dismissed in their entirety, with prejudice and without costs or fees to either party.

The securities regulator had charged the two executives “for aiding and abetting Defendant Ripple Labs Inc.’s violations … with respect to Ripple’s offers and sales of XRP in ‘Institutional Sales,'” the filing describes.

In a letter to District Judge Analisa Torres on Thursday, the SEC notified the court of the stipulated dismissal of its pending claims against Garlinghouse and Larsen. The SEC stated:

This voluntary dismissal obviates the need for the scheduled trial on this claim and moots the October 2, 2023, scheduling order.

“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 letter continues. The SEC requested the court until Nov. 9 “to propose such schedule to this court or, if the parties cannot agree, to seek a briefing schedule from the court on a contested basis.”

Early this month, Judge Torres rejected the securities regulator’s bid to appeal her ruling regarding XRP. SEC Chairman Gary Gensler said in July that the regulator is “disappointed” with the XRP ruling on retail investors.

Ripple CEO Brad Garlinghouse commented on social media platform X: “In all seriousness, Chris and I (in a case involving no claims of fraud or misrepresentations) were targeted by the SEC in a ruthless attempt to personally ruin us and the company so many have worked hard to build for over a decade.” The chief executive added: “The SEC repeatedly kept its eye off the ball while secretly meeting with the likes of SBF [Sam Bankman-Fried, former CEO of the collapsed crypto exchange FTX] — failing again and again to protect U.S. consumers & businesses. How many millions of taxpayer $ were wasted?! Feels good to finally be vindicated.”

Ripple’s chief legal officer, Stuart Alderoty, opined on X:

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.

“That’s 3 consecutive wins for Ripple including the July 13 decision ruling that as a matter of law XRP is NOT a security, the Oct 3 decision denying the SEC’s bid for an interlocutory appeal, and now this,” he detailed.

XRP rose nearly 6% in response to the SEC’s lawsuit dismissal against Ripple executives, followed by a minor retracement. At the time of writing, the price of XRP is around $0.51.