In a surprising move, the United States Securities and Exchange Commission (SEC) has announced the dismissal of its case against Ripple Labs’ CEO Brad Garlinghouse and founder Chris Larsen, marking a significant turning point in the ongoing legal battle between Ripple Labs Inc.
“Plaintiff Securities and Exchange Commission (“SEC”) respectfully notifies the Court of the stipulated dismissal of the SEC’s pending claims against Defendants Christian Larsen and Bradley Garlinghouse (“Individual Defendants”).” A letter addressed to Judge Torres by the SEC read.
In a statement, Ripple Labs clarified that the dismissal was made without prejudice, indicating that the allegations have been dropped without any bearing on potential future legal actions.
This surprising development represents a significant triumph for Ripple Labs, building on the firm’s previous success in July when Judge Analisa Torres determined that the sale of XRP on secondary markets did not meet the criteria for an investment contract.
Notably, the SEC’s case against Ripple Labs was complex, involving allegations that the company’s leadership orchestrated the sale of XRP, classifying it as an investment contract.
That said, following the announcement, Brad Garlinghouse couldn’t resist a touch of humor, tweeting, “Today was an even better day. Ripple: 3, SEC: 0.” He went on to highlight the SEC’s questionable actions during the case, suggesting that they had wasted millions of taxpayer dollars.
Chris Larsen, Executive Chairman of Ripple Labs, also expressed his thoughts on the matter, saying, “Today, we are legally vindicated and personally redeemed in our battle against a troubling attempt to abuse the rules to advance a political agenda aimed at suffocating crypto in America. It is a travesty that we were forced to defend ourselves from an ill-advised attack that was flawed from the day it was filed.”
On the other hand, Stuart Alderoty, Ripple’s chief legal officer, shared his perspective, calling the SEC’s actions a “surrender” rather than a settlement, adding that they had made a serious mistake by targeting Garlinghouse and Larsen personally.
That said, this latest success could further reinforce the precedent set by the XRP case for other cryptocurrencies, including Cardano (ADA), Solana (SOL), and Polygon (MATIC), which are also under SEC scrutiny. Additionally, the unchallenged ruling favouring Grayscale has bolstered hopes for the eventual approval of a Bitcoin spot ETF.
Meanwhile, the news sent XRP’s value soaring, with the cryptocurrency surging by nearly 10% in minutes to reach $0.51. This impressive gain came after a period of low volatility in the crypto markets for the better part of Thursday.
The crypto community was also quick to react to the news, with the hashtag “#firegarygensler” dominating social media discussions, particularly on platforms like X (formerly Twitter).