The U.S. Securities and Exchange Commission (SEC) has withdrawn its lawsuit against Ripple CEO Brad Garlinghouse and co-founder Chris Larsen. In a court filing submitted to the U.S. District Court for the Southern District of New York, the legal representatives for the SEC, Ripple, Garlinghouse, and Larsen jointly declared:
“It is now stipulated and agreed … that the claims alleged by Plaintiff Securities and Exchange Commission against Defendants Bradley Garlinghouse and Christian A. Larsen … are hereby dismissed in their entirety, with prejudice and without costs or fees to either party.”
The lawsuit had accused the two executives of “aiding and abetting Defendant Ripple Labs Inc.’s violations … with respect to Ripple’s offers and sales of XRP in ‘Institutional Sales.'”
In a letter addressed to District Judge Analisa Torres, the SEC informed the court of the mutually agreed dismissal of its pending claims against Garlinghouse and Larsen, which eliminates the need for the scheduled trial and moots the October 2, 2023, scheduling order.
The SEC and Ripple now intend to discuss potential briefing schedules regarding remedies for Ripple’s Section 5 violations in relation to institutional sales of XRP. If no agreement is reached between the parties, the SEC has requested court intervention to establish a contested schedule by November 9.
Earlier this month, Judge Torres rejected the SEC’s request for an appeal regarding her ruling on XRP. SEC Chairman Gary Gensler expressed disappointment in July regarding the XRP ruling’s implications for retail investors.
In response to the lawsuit’s dismissal, Ripple CEO Brad Garlinghouse commented on the X social media platform, stating that he and Chris were targeted by the SEC in an attempt to undermine them personally and the company’s decade-long efforts. He criticized the SEC for not adequately safeguarding U.S. consumers and businesses and questioned the amount of taxpayer dollars spent on the case. Ripple’s chief legal officer, Stuart Alderoty, characterized the dismissal as a “surrender” by the SEC.
The development led to a nearly 6% rise in XRP’s price, followed by a minor retracement. As of the time of writing, XRP is trading at around $0.51.