SEC Drops Charges Against Ripple
Date: 2025-03-20 Author: Gabriel Deangelo Categories: BUSINESS
According to the entrepreneur, the trial has dragged on for more than four years.
“In hindsight, it’s clear that the case didn’t have any prospects from the start. In fact, it was one of the first large-scale attacks on the cryptocurrency industry,” Garlinghouse said.
The SEC filed a lawsuit against Ripple in December 2020, accusing the company of selling unregistered securities in the form of XRP worth $1.3 billion. Garlinghouse himself and co-founder Chris Larsen were also named as defendants.
In July 2023, Judge Analisa Torres of the Southern District of New York ruled that programmatic sales and other forms of distribution of XRP do not fall under the definition of investment contracts. However, according to the court's decision, direct sales of the token to institutional investors violated securities laws.
The SEC attempted to challenge this decision, but the court rejected the appeal, citing a lack of evidence and the lack of significant benefit to the final outcome of the case.
Soon after, the SEC withdrew the lawsuit against Garlinghouse and Larsen. The parties reached a settlement agreement, which avoided further litigation.
In August 2024, the court issued a final verdict, fining Ripple $125 million, although the regulator initially demanded a payment of $2 billion. In October, the SEC attempted to reconsider this decision, proposing to re-examine the issue of selling XRP on digital platforms, as well as the role of Garlinghouse and Larsen in these processes.
Garlinghouse emphasized that Ripple was the first company with sufficient resources and determination to withstand pressure from the regulator. He called the current developments a “long overdue capitulation by the SEC” and thanked the crypto industry for their support.
Ripple’s chief legal officer Stuart Alderothy said the company would consider filing a counterclaim against the SEC.
