- The SEC filed a lawsuit against Ripple Labs in 2020 alleging XRP was an unregistered security, but has now dropped all charges against Ripple executives in a major defeat.
- Ripple won key legal victories proving XRP is not a security, undermining the SEC’s case and forcing them to retreat.
- Ripple declares total vindication, but work remains to establish clear crypto regulations in the US going forward.
The SEC filed a lawsuit against Ripple Labs in 2020, alleging that XRP should have been registered as a security. This sent shockwaves through the crypto industry. However, a series of legal victories has now forced the SEC into a full retreat.
The Original Allegations
In December 2020, the SEC filed a lawsuit against Ripple Labs and two of its executives, CEO Brad Garlinghouse and Chairman Chris Larsen. The SEC claimed that Ripple’s distributions of XRP starting in 2013 should have been registered as securities offerings. The lawsuit did not allege any fraud, but rather that Ripple had violated registration requirements.
Major Legal Victories for Ripple
Ripple fought back hard against the SEC’s allegations. In July 2023, a judge ruled decisively that XRP is not a security. This was a huge blow to the foundation of the SEC’s case. The SEC tried to appeal this ruling but failed.
With the SEC’s case falling apart, a trial was scheduled for next year against Garlinghouse and Larsen personally. However, today the SEC moved to dismiss all remaining charges against these executives. The stunning surrender ends the SEC’s legal crusade against Ripple.
Ripple Declares Total Vindication
In a statement, Ripple CEO Brad Garlinghouse said: “For nearly three years Chris and I have been the subject of baseless allegations from a rogue regulator with a political agenda…Today we are legally vindicated and personally redeemed in our battle against a troubling attempt to abuse the rules in order to advance a political agenda to suffocate crypto in America.”
Chairman Chris Larsen added: “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.”
The Future of Crypto Regulation
While Ripple has won a major victory, work remains to be done on establishing clear crypto regulations in the US. Ripple says it will continue to engage with policymakers to advocate for responsible innovation. However, the dismissal of charges against its executives removes a dark cloud that has hung over the company for years.