The United States Securities and Exchange Commission (SEC) has made the unprecedented decision to dismiss its high-profile lawsuit against Ripple CEO Brad Garlinghouse and co-founder Chris Larsen. This move follows a US judge’s denial of the SEC’s appeal, which came as a result of a July ruling that favored Ripple, sending shockwaves throughout the cryptocurrency industry.
The legal saga began in 2020 when the SEC accused Ripple of raising more than $1.3 billion through an unauthorized digital asset securities offering. This accusation sent ripples through the crypto community, as it raised fundamental questions about the classification of cryptocurrencies. However, a groundbreaking ruling in July shattered the status quo by declaring that Ripple’s XRP sales to the general public were not considered securities.
A Surrender, Not a Settlement
The recent decision by the SEC to drop the lawsuit against Ripple’s top executives signifies a significant departure from its initial stance. Ripple’s Chief Legal Officer, Stuart Alderoty, has gone on record to emphasize that this is not a settlement but a clear “surrender.” This pronouncement has been met with applause from the cryptocurrency industry, which views it as a potential game-changer for the broader regulatory framework surrounding digital assets.
Brad Garlinghouse, the CEO of Ripple, expressed relief at the outcome, stating that he had been unfairly “targeted by the SEC in a ruthless attempt to personally ruin [him] and the company so many have worked hard to build for over a decade.” Despite the challenging legal battle, he saw this as “another win” for Ripple, while also condemning the SEC for their alleged secretive meetings with industry figures like Sam Bankman-Fried.
The effects of this legal turnaround have reverberated throughout the cryptocurrency market. Following the news, XRP, Ripple’s native digital asset, experienced a noticeable uptick of over 6%. While it slightly retreated from its highs, this positive market response underscores the far-reaching implications of the SEC’s decision.
With the lawsuit against Ripple’s top executives now dismissed, the SEC and Ripple will embark on further discussions. Their aim is to outline a potential briefing schedule regarding suitable remedies for Ripple. This move towards resolution is not just a victory for Ripple but also sets an intriguing precedent for crypto regulation in the United States. As the crypto world watches with bated breath, the outcome of these discussions could significantly shape the future of cryptocurrency regulation in the United States and beyond.