It was reported yesterday that the Securities and Exchange Commission (SEC) had dropped its charges against Ripple executives Brad Garlinghouse (CEO) and Chris Larsen (Chairman). Charges remain for Ripple itself.
Ripple has posted a release on the legal victory, calling it a “stunning capitulation by the government.”
Garlinghouse stated:
“For nearly three years, Chris and I have been the subject of baseless allegations from a rogue regulator with a political agenda. Instead of looking for the criminals stealing customer funds on offshore exchanges that were courting political favor, the SEC went after the good guys – along with our entire company of innovators and entrepreneurs – who are building a regulated business based in the U.S. We look forward to the day this chapter is closed once and for all, now that the SEC has dropped the curtain on their absurd theatrics against Chris and me.”
Larsen said:
“Today, we are legally vindicated and personally redeemed in our battle against a troubling attempt to abuse the rules in order to advance a political agenda to suffocate 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. While justice ultimately prevailed, the government’s actions that led to this point raise questions about the origin, and motivation of this lawsuit. It is an abuse by the administrative state that politically connected special interests, with clear and proven conflicts of interest, were able to drag our names through the mud in an attempt to ruin us personally and destroy a company so many have worked so hard, for so long to build.”
Ripple said the turmoil of regulatory uncertainty is the cause for the problem – that and the SEC’s “misguided quest for power.”
The SEC has come under growing scrutiny from policymakers under the leadership of Chair Gary Gensler who has pursued a social mission that has veered beyond its mission of efficient markets and facilitating capital formation while keeping investors safe. While Gensler was first embraced by crypto advocates due to his tenure teaching about Fintech and crypto, his Commission has been described as one of the most political in recent memory.