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SEC Drops Charges Against Ripple Execs: Crypto Regulation Shifts
Crypto Regulation | Oct 20, 2023
Image: Pixabay/vjkombajn
The U.S. Securities and Exchange Commission (SEC) has decided to drop its charges against Ripple's CEO, Brad Garlinghouse, and Executive Chairman, Chris Larsen.
- The SEC had accused Ripple's top leaders of aiding the company in violating federal securities laws through its XRP transactions. This case has been closely watched as it serves as a bellwether in the ongoing dispute between the crypto industry and the SEC regarding the definition of a security.
- This decision brings the long-standing case, which has been winding its way through federal courts for years, closer to an initial conclusion and potentially paves the way for an appeal.
Key Developments
- The SEC will no longer pursue claims against Garlinghouse and Larsen, effectively canceling a trial that was scheduled for the following year.
- Both parties have agreed to voluntarily dismiss the aiding and abetting charges against the two executives with prejudice, which means these charges cannot be filed again.
- Despite this, the SEC will continue to pursue its claims against Ripple.
- Garlinghouse commented on the situation, stating that for nearly three years, they have been subjected to "baseless allegations from a rogue regulator with a political agenda."
See: Key Moments Inside the SBF Trial: Days 1-12
- Ripple had previously achieved a partial victory in July when a judge ruled that the company did not violate federal securities laws by making XRP available to retail investors. However, the company was found to have violated the law when selling XRP directly to institutional investors.
- The SEC and Ripple will continue discussions, particularly concerning the remedies against Ripple for its Section 5 violations related to its institutional sales of XRP.
Market Implications and Ripple's Global Focus
- Ripple, in the meantime, has shifted its focus internationally, conducting almost 90% of its business outside the U.S. The SEC's approach to crypto firms and its assertion that most cryptocurrencies should be considered securities has faced challenges in court.
- With the lack of clear crypto regulatory laws from Congress, these court battles might set the standards for how the U.S. government approaches digital assets in the future.
The decision by the SEC to drop charges against Ripple's top executives marks a significant moment in the evolving relationship between regulatory bodies and the crypto industry.
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