SEC Clears Ripple CEO Garlinghouse and Chairman Larsen of Charges
The United States SEC has dropped its charges against Garlinghouse and Larsen.
The SEC has invited Ripple Labs to negotiate a settlement over its institutional sale of XRP.
90% of Ripple business is outside the United States.
Keywords: SEC Cases against Ripple, SEC lawsuit, Ripple Labs, Ripple coin, buy Ripple, buy XRP, SEC vs. Ripple, SEC battle
Introduction
The SEC case against Ripple has been ongoing since 2020 when the Security and Exchange Commission filed a lawsuit against Ripple Labs and its utives, Brad Garlinghouse, Ripple’s CEO and Chris Larsen, the utive Chairman.
Already, Ripple Labs has scored “three victories” against the SEC. This article deliberates on Ripple’s most recent win against the SEC: the Federal agency’s withdrawal of charges against Ripple utives.
SEC Drops Charges against Garlinghouse Larsen
The SEC has cleared two Ripple Labs utives Brad Garlinghouse, Ripple’s CEO and Chris Larsen, the utive Chairman, of any wrongdoing in the on-going legal battle between the two organizations.
According to the SEC lawsuit, Garlinghouse and Larsen aided Ripple Labs in violating the United States securities law. Therefore, the SEC included them as defendants alongside their firm, Ripple Labs.
Read also: SEC’s Attempt to Appeal Ripple Case Loss Rejected
Nevertheless, on Thursday, 19 October, the SEC through its court filings dropped charges against the two Ripple Labs utives. In fact, the regulator voluntarily dismissed the aiding and abetting allegations levelled against them. However, the SEC will continue with its legal battle against Ripple Labs.
The SEC’s recent declaration marks Ripple Labs’ third victory against the Federal regulatory authority. Ripple’s first partial victory in the SEC battle was on 13 July when the U.S. District Judge Analisa Torres ruled that the Ripple coin is not a security when traded on exchanges.
For the second time, Ripple Labs also won in the SEC vs. Ripple case when Judge Torres rejected the Security and Exchange Commissions’ interlocutory appeal against the 13 July court ruling. This time around, the SEC has voluntarily withdrawn its charges against Garlinghouse and Larsen.
The SEC’s withdrawal of charges against Garlinghouse and Larsen brought relief upon them. Regarding that, Garlinghouse said, “For nearly three years, Chris and I have been the subject of baseless allegations from a rogue regulator with a political agenda.”
He added, “Instead of looking for the criminals stealing customer funds on offshore exchanges that were courting political favor, the SEC went after the good guys - along with our entire company of innovators and entrepreneurs - who are building a regulated business based in the U.S.”
In the meantime, both the SEC and Ripple aim to have an amicable settlement. Indeed, the SEC has stated its intention to meet Ripple Labs and have an open discussion towards a settlement on its institutional sale of XRP.
In its recent court filing the SEC said, “The SEC and Ripple intend to meet and confer on a potential briefing schedule with respect to the pending issue in the case – what remedies are proper against Ripple for its Section 5 violations with respect to its Institutional Sales of XRP.”
SEC Case against Ripple
Let’s briefly look at the SEC vs. Ripple case. The SEC battle against Ripple Labs started in December 2020 when the regulator filed a lawsuit against the latter. The SEC alleged that Ripple Labs violated the United States security laws by selling XRP without registering it as a security.
Since then, the SEC has maintained its position, claiming that the Ripple coin meets the Howey Test criteria. However, Ripples Labs has always denied the allegations. That is why, on 29 January 2022, it filed a motion to dismiss the charges. Ripple’s argument is that the Ripple coin is a currency as it functions as a medium of exchange.
How the SEC Battle has Affected Ripple and XRP Coin?
The SEC vs. Ripple case has resulted in a decline in XRP’s adoption in the United States due to several reasons. First, the major exchanges like Coinbase, OKCoin and Crypto.com delisted XRP, meaning that it became less accessible to people than before. However, with time some crypto exchanges like Crypto.com relisted it.
Second, the SEC lawsuit against Ripple dampened the faith that investors had in the XRP coin. That led to a decrease in its demand as well as value. Basically, the lawsuit resulted in a negative sentiment against the coin among some sectors.
Sadly, some companies like MoneyGram which had started to use XRP to settle financial transactions were also affected. On the other hand, Ripple Labs’ developmental agenda related to the XRP ledger was affected as the firm spent much of its effort on handling the SEC vs. Ripple issue.
Read also: XRP Price Prediction & Forecast for 2023, 2025, 2030
Ripple’s Global Expansion: Over 90% of Business outside the United States
The uncertainty which the crypto crackdown in the United States has caused has forced many cryptocurrency firms to increase their investment in other regions of the world. A good example is that of Ripple which has more than 90% of its business outside the U.S.
Already, Ripple has established offices and operational units in other countries, especially Asia and the Middle East. For example, it has offices in Dubai located in Dubai International Financial Centre (DIFC).
It also has business units in the Middle East and North Africa (MENA) where 20% of RippleNet customers, like Lulu Financial Holdings, Al-Ansari Exchange SABB RAK Bank and Qatar National Bank are based. These partners oversee financial remittances to countries such as Saudi Arabia, India UAE and Bahrain.
Recently, it also acquired a payments institution license in Singapore which enables it to serve the Asia-Pacific region. Also, Ripple will offer regulated payment services in Singapore, one of Asia’s crypto hubs.
In respect of this, Garlinghouse, the CEO of Ripple said, “Since establishing Singapore as our Asia Pacific headquarters in 2017, the country has been pivotal to Ripple’s global business. We plan to continue growing our presence in a progressive jurisdiction like Singapore.”
Conclusion
The SEC has cleared two Ripple Labs utives of any wrong doings on the sale of XRP without registration. However, the Ripple vs. SEC case is still on-going and the two parties wish to find an amicable settlement. In the meantime, Ripple has stated that 90% of its business operations are outside the United States.
FAQs about Ripple
Did SEC drop the case against Ripple?
The SEC has not dropped its case against Ripple Labs. It has only withdrawn its allegations against Ripple Labs’ two utives, Brad Garlinghouse, Ripple’s CEO and Chris Larsen, the utive Chairman. The SEC will further pursue its case against Ripple Labs it accuses of selling an unregistered security, XRP.
Who is behind XRP Ripple?
In 2012 Jed McCaleb, a programmer and Chris Larsen, an entrepreneur, started Ripple Labs, a company that is behind Ripple crypto (XRP). Brad Garlinghouse, Ripple Labs CEO and Chris Larsen, the chair, manage Ripple Labs and are in charge of the XRP coin. Read also: Catalysts that Could Propel Ripple (XRP) to New heights
How much is Chris Larsen worth?
According to Forbes, Chris Larsen, Ripple Labs’ chair and an American businessman, is currently worth about $2.6 billion. In 2012 Larsen co-founded Ripple which has increased his worth. However, Larsen owns other enterprises like E-Loan and Prosper Marketplace.
Is Brad Garlinghouse still the CEO of Ripple?
Brad Garlinghouse is still the CEO for Ripple. Since 2020 the SEC has accused Garlinghouse alongside Chris Larsen of violating the United States securities law through selling an unregistered security XRP. However, recently the SEC dropped the charges against them.
