US SEC Drops Claims Against Two Ripple Labs Executives
SEC Drops Claims
The U.S. Securities and Exchange Commission (SEC) has dropped claims against two executives from Ripple Labs, a blockchain company. This decision comes as part of a lawsuit in which the SEC alleged that Ripple violated U.S. securities law. The court filing in New York on Thursday revealed that the SEC is no longer pursuing claims against Ripple Chief Executive Brad Garlinghouse and co-founder Chris Larsen for aiding and abetting the sales of the cryptocurrency XRP, which a judge has determined to be unregistered sales of securities.
SEC Lawsuit Against Ripple
In December 2020, the SEC filed a lawsuit against Ripple, accusing the company of illegally raising over $1.3 billion through the unregistered sale of XRP, a cryptocurrency. However, in July, U.S. District Judge Analisa Torres ruled partially in favor of Ripple, stating that sales of XRP on public exchanges did not qualify as unregistered securities offerings. The judge also rejected the SEC’s request to appeal this ruling.
Partial Win for Ripple
Although the court ruled in favor of Ripple regarding sales on public exchanges, it also acknowledged that the company’s $728.9 million of XRP sales to hedge funds and other sophisticated buyers violated the law. The SEC’s claims against Garlinghouse and Larsen, relating to their involvement in these sales, were set to be tried before a jury.
Despite this development, it’s important to note that the lawsuit is still ongoing, and Ripple will continue to face legal challenges regarding its XRP sales. The outcome of the case will have significant implications for the future regulation of cryptocurrencies and their status as securities.
As the legal battle continues, the crypto community eagerly awaits further updates on the case, which could potentially reshape the regulatory landscape for blockchain companies and their digital assets.