In a historic turn of events, the United States Securities and Exchange Commission (SEC) has dropped its lawsuit against Ripple Labs Executives Brad Garlinghouse and Chris Larsen. The lawsuit, which had been ongoing since December 2020, was dismissed without prejudice.
Ripple Labs, an American blockchain payments firm, announced the dismissal of the charges, marking a significant victory for the company. The SEC had accused Ripple’s executives of orchestrating the sales of XRP, which it considered an investment contract. The dismissal of these charges has been described by the firm as “a stunning capitulation by the government”.
Crypto Industry Celebrates Ripple’s Victory
In a statement, Executive Chairman Chris Larsen said, “Today, we are legally vindicated and personally redeemed in our battle against a troubling attempt to abuse the rules to advance a political agenda to suffocate crypto in America. It is a travesty that we were forced to defend ourselves from an ill-advised attack that was flawed from the day it was filed”.
Despite this victory, Ripple confirmed that it will continue to fight for more regulatory clarity in the US. This development is seen as a major setback for the SEC, which has previously scored several victories against crypto firms.
The dismissal of the lawsuit follows an unexpected ruling by Judge Analisa Torres in July. She declared that Ripple’s sale of XRP on exchanges did not constitute an unregistered security. This ruling has set a strong precedent that might also vindicate other cryptocurrencies like Cardano (ADA), Solana (SOL), Binance Coin (BNB), and Polygon (MATIC) that are also being targeted by the SEC.
The news of the lawsuit dismissal led to a 5% jump in XRP’s price. The crypto industry is closely watching this development as it could have far-reaching implications for other cryptocurrencies and their regulatory status.
The regulatory ambiguity and turmoil instigated by the SEC’s ill-conceived power grab have resulted in the migration of cryptocurrency innovation to foreign shores. Ripple conducts nearly 90% of its operations outside the United States, with hiring efforts concentrated in key global markets.
Moreover, the successful outcome for Grayscale and the regulator’s decision not to contest the verdict have sparked optimism that the approval of a Bitcoin spot ETF might be on the horizon.
