SEC Drops Charges Against Ripple's CEO and Chairman in Ongoing XRP Case

The U.S. Securities and Exchange Commission (SEC) has decided to no longer pursue allegations against Ripple's CEO Brad Garlinghouse and Executive Chairman Chris Larsen, who were accused of aiding and abetting the company's violations of federal securities laws in its XRP transactions. This decision marks a significant development in the lengthy legal battle between the SEC and Ripple, and it could bring the case closer to a potential appeal.

The dropped charges were related to the aiding and abetting claims against Garlinghouse and Larsen. As part of this decision, a trial scheduled for next year involving the executives has been canceled. The dismissal of the aiding and abetting charges was made "with prejudice," which means they cannot be brought back in the future. However, the SEC will continue to pursue its claims against Ripple itself.

Ripple, a blockchain company known for its cryptocurrency XRP, previously won a partial victory in July when a judge ruled that the company had not violated federal securities laws by offering XRP to retail investors through exchanges. Nonetheless, the judge determined that Ripple had indeed violated federal securities laws by directly selling XRP to institutional investors.

This remaining issue, focusing on the institutional sales, is where the SEC and Ripple will continue to engage in discussions. According to the recent filing, both parties intend to determine the appropriate remedies against Ripple for its Section 5 violations concerning its Institutional Sales of XRP.

Brad Garlinghouse, Ripple's CEO, expressed his view on the matter, saying, "For nearly three years, Chris and I have been the subject of baseless allegations from a rogue regulator with a political agenda." He criticized the SEC for targeting Ripple while failing to address fraudulent activities on offshore exchanges.

The case between Ripple and the SEC is considered a pivotal one in the ongoing debate about whether cryptocurrencies should be classified as securities. Ripple's recent legal victories may have significant implications for the broader cryptocurrency industry.

The price of XRP experienced a 4.1% increase following the news, reaching $0.51. An attempt by the SEC to appeal its previous court loss in the Ripple case was denied earlier this month, allowing other aspects of the case to proceed to trial.