SEC Drops Charges Against Ripple Executives, Concluding Three-Year Legal Battle

The U.S. Securities and Exchange Commission (SEC) has decided to drop its charges against CEO Brad Garlinghouse and Executive Chairman Chris Larsen. The allegations involved XRP being classified as unregistered securities, concluding a legal dispute that started in late 2020. Ripple’s executives have characterized the SEC as a “rogue regulator” with a “political agenda.”

Garlinghouse criticized the SEC for focusing on their U.S.-based regulated operations that provide blockchain infrastructure for cross-border payments, rather than targeting offshore exchanges involved in illicit activities. As a result of the SEC’s adversarial approach, Ripple moved about 90% of its operations, along with most of its hiring in the third quarter of 2023, overseas.

Larsen considered the dismissal a win against what he described as a troubling effort to stifle cryptocurrency innovation in the U.S. He also implied that the lawsuit was influenced by “politically connected special interests.” The SEC has similarly charged other companies such as Coinbase and Binance; Coinbase for listing unregistered securities and running an “illegal exchange,” and Binance for serious violations like the co-mingling of customer funds.

On Thursday, the SEC recommended to a federal judge the dismissal of the case against Ripple’s top executives and planned to seek appropriate remedies for issues related to Ripple’s unregistered institutional XRP sales. Ripple was accused of misleading investors with sales exceeding $1 billion, but the ruling indicated that these sales did not constitute securities offerings, which led to a 6% increase in XRP’s value.