Attorneys for the U.S. Securities and Exchange Commission (SEC) filed a motion to dismiss the lawsuit against Ripple executives Brad Garlinghouse and Chris Larsen.
A motion was filed in the U.S. District Court for the Southern District of New York in which SEC representatives notified the court that the regulator saw no need to schedule a hearing on the lawsuit against Ripple Labs executives.
However, the statement doesn’t mention that the SEC plans to drop the civil suit against Ripple itself. Moreover, in the document, the regulator asks the court to set a schedule for consultation meetings between representatives of the SEC and Ripple, during which the company’s documentation regarding institutional sales of XRP will be reviewed.
Ripple officials issued a statement calling the regulator’s actions a “capitulation.” According to Brad Garlinghouse, CEO of Ripple, he and Chris Larsen, Ripple’s Co-Founder, have been the targets of unfounded accusations from the regulator for three years. He also said that the regulator accused them instead of looking for criminals on exchanges that bought political support, clearly alluding to the bankrupt crypto exchange FTX and the SEC’s inaction on the matter.
Stuart Alderoty, Ripple’s Chief Legal Officer, also called the SEC’s statement a “surrender” rather than a settlement. In his opinion, the regulator finally realized that it made a serious mistake by starting to prosecute the company’s executives and that this approach won’t bring the desired results.
The SEC filed a lawsuit against Ripple executives in December 2020, accusing Garlinghouse and Larsen of illegally selling XRP tokens interpreted as securities by the SEC. In July 2023, the federal court ruled that XRP isn’t a security when sold to retail investors. The regulator planned to appeal that decision by filing an interlocutory appeal, which the court dismissed in October for lack of substantial grounds.
