The U.S. Securities and Exchange Commission recently dropped all charges against Ripple executives Brad Garlinghouse and Chris Larsen. Now, this dismissal has been made official. Defense attorney James K. Filan shared on X that U.S. District Judge Analisa Torres has officially signed an order dismissing the SEC’s case against the Ripple executives.
The SEC filed aiding and abetting charges against Garlinghouse and Larsen in December 2020, accusing the executives of raising capital for Ripple through the sales of XRP to institutional investors. The SEC also alleged that these individuals conducted unregistered sales of XRP, totaling approximately $600 million.
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The SEC alleged that Ripple violated securities laws by failing to register their offers and sales of XRP or qualify for an exemption from registration. The SEC classified Ripple’s sales of XRP into institutional, programmatic, and other distributions.
The charges were specifically related to the institutional sales of XRP. In July, Judge Torres ruled that programmatic sales and other distributions did not violate securities laws. However, she deemed the institutional sales of XRP to be investment contracts that violated securities laws.
Initially, the court had scheduled a trial for next year to address the SEC’s case concerning institutional sales of XRP. However, this trial will no longer happen because the SEC has dropped the charges against Ripple’s executives.
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What’s Next for Ripple and the SEC?
With the case against Ripple’s executives officially dismissed, the cryptocurrency community and legal experts have been speculating about the SEC’s potential next steps. The SEC believes the battle is not over, and as the lawsuit enters the penalty phase, the regulator will be looking to squeeze a large settlement amount out of Ripple.
Additionally, the SEC has the option to appeal the case once Judge Torres issues the final judgment. Previously, the SEC attempted to file an interlocutory appeal, challenging the court’s summary judgment decision in July. However, the appeal was denied, and the SEC was instructed to wait for the final judgment.
The decision to drop the charges against Garlinghouse and Larsen allows the SEC to appeal sooner if it chooses to, but this can only happen after the final judgment. Although the SEC might have some more tricks up its sleeve, a prominent attorney believes that for all intents and purposes, the Ripple v. SEC case is over.
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