The Securities and Exchange Commission (SEC) has decided to end to lawsuits against Ripple executives, CEO Brad Garlinghouse and President Chris Larsen. These lawsuits, which focused on alleged violations of rules on securities linked to XRP transactions, have sparked heated debates within the crypto community.
The SEC’s decision to focus solely on the main case against Ripple not only eased tensions but also resulted in a spectacular surge in the price of XRP. In this context, we will explore the details of this case and the potential repercussions on the cryptocurrency ecosystem.
SEC drops part of lawsuit against Ripple
After years of legal battles, the US Securities and Exchange Commission (SEC) chose to no longer pursue Ripple for certain accusations. This decision marks a turning point in one of the most closely followed cases between the cryptocurrency industry and the SEC over the definition of securities.
SEC Retracts Certain Accusations
According to official documents released last Thursday, SEC will no longer prosecute Ripple CEO Brad Garlinghouse or company executive chairman Chris Larsen, for aiding and abetting illegal XRP transactions. This decision de facto cancels a trial which was to take place next year.
“For almost three years, Chris and I have been the target of baseless allegations from a regulator with political agendas,” Garlinghouse said.
It is important to note that Ripple had already achieved a partial victory in July. Judge Analisa Torres had ruled that the company had not violated federal laws on securities by making XRP available to the general public. However, it had mentioned a violation during the direct sale of XRP to institutional investors.
Ongoing discussions between Ripple and the SEC
The dropped charges mainly concern institutional sales, which should have been judged next April. The SEC and Ripple will continue their discussions on this matter. An SEC spokesperson declined to comment, while a Ripple press release called the retraction a “capitulation” and the initial lawsuit “theatrical absurdities”.
Following the announcement, XRP experienced an increase of 7.15% in just 24 hours, rising from $0.47 yesterday to a high of $0.52 today. It eventually settled around $0.51, establishing its new resistance for the week.
It is also worth remembering that the SEC has suffered several legal setbacks in its quest against the cryptocurrency companies it accuses to violate securities laws. SEC Chairman Gary Gensler insists that almost all cryptocurrencies should be considered securities under the SEC’s jurisdiction. However, American judges regularly consider that reality is much more complex.
Pending clear legislation from Congress on cryptocurrencies, these legal battles could define U.S. standards for digital assets. Meanwhile, Ripple claimed to now achieve nearly 90% of its business outside the United States.
Is the SEC maneuvering to speed up its appeal process?
Katherine Kirkpatrick, chief legal officer of Cboe Digital, suggested that the SEC may have abandoned these cases as a legal tactic, accelerating thus the appeal process. She shared this perspective in a recent tweet, pointing out that the SEC has voluntarily waived his complaint against senior Ripple executives.
The SEC has voluntarily dismissed the case against #Ripple senior execs. 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.
— Katherine Kirkpatrick (@kkirkbos) October 19, 2023
This approach allows them to appeal the decision regarding Ripple much earlier than expected. Without this action, they would have had to wait until the conclusion of the trial scheduled for late spring. This comment from Kirkpatrick indicates a possible strategy on the part of the SEC to speed up ongoing legal proceedingslet’s remain attentive to the next twists and turns in the case.
Source: CoinDesk
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