The US Securities and Exchange Commission (SEC) has officially decided to cease its legal actions against Ripple Labs executives, including co-founder and chairman Chris Larsen and CEO Brad Garlinghouse.
A recent court document highlighted, “Plaintiff, SEC, respectfully notified the court of the stipulated dismissal of the SEC’s pending claims against defendants Christian Larsen and Bradley Garlinghouse.”
This update was revealed to the public by a lawyer who advocates for XRP, James K. Filan.
Ripple’s Legal Chief Claims Victory
The Chief Legal Officer of Ripple, Stuart Alderoty, responded to this development by emphasizing that the SEC’s decision wasn’t a mere settlement but an outright “surrender”. He stated, “This is not a Settlement. This is a Surrender by the SEC.”
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The XRP community reacted energetically to this news. Some speculate that the SEC’s decision to withdraw the charges may be to avoid facing another legal loss, given its previous court experiences.
A significant legal point to remember is the court’s declaration on July 13, which determined that the majority of XRP transactions that the SEC labelled as securities did not fit that classification. This reduced the SEC’s case strength significantly.
XRP Experiences a Price Surge
Following the release of this news, XRP’s market performance experienced a boost. Data from CoinMarketCap showed that the cryptocurrency’s value jumped by over 12% shortly after the announcement. XRP reached a high of $0.528 within 24 hours from a starting point of $0.477. As of the last update, XRP was trading at $0.5128, marking a 7.76% increase within the day.
Historically, the SEC had accused Garlinghouse and Larsen of assisting Ripple Labs in bypassing securities regulations through XRP sales to major investors. However, a pivotal judgment on July 13 established that while Ripple’s sales to institutions were investment contracts, those to individual investors were not. This led to a proposed jury trial for April 2024.
What’s Next for Ripple and SEC?
With the SEC’s latest move to dismiss charges, the April 2024 trial is now off the table. The focus now shifts to the remedies for Ripple’s acknowledged violation of securities regulations concerning sales to institutions.
Following this, the SEC might either appeal the entire case or potentially settle with Ripple, although the regulator has yet to hint at a possible settlement. Current indications suggest that the SEC is more inclined to challenge the July 13 verdict, which defined certain XRP sales as non-securities.