The U.S. Securities and Exchange Commission (SEC) has formally dropped all charges against Ripple CEO Brad Garlinghouse and co-founder Chris Larsen. In a joint filing with the U.S. District Court for the Southern District of New York on October 19, 2023, attorneys for the SEC, Ripple, and the two executives stipulated that the claims against Garlinghouse and Larsen be dismissed in their entirety, with prejudice and without costs or fees to either party.
SEC Abandons Personal Claims
The SEC had originally accused the two executives of “aiding and abetting” Ripple’s violations of securities laws related to institutional sales of XRP. The regulator’s letter to District Judge Analisa Torres explained that the voluntary dismissal “obviates the need for the scheduled trial on this claim and moots the October 2, 2023, scheduling order.” The SEC also stated it would meet with Ripple to propose a briefing schedule regarding appropriate remedies for Ripple’s institutional XRP sales, with a deadline of November 9.
Ripple Executives Respond
In a statement on social media platform X, Brad Garlinghouse wrote: “Chris and I (in a case involving no claims of fraud or misrepresentations) were targeted by the SEC in a ruthless attempt to personally ruin us and the company so many have worked hard to build for over a decade. The SEC repeatedly kept its eye off the ball while secretly meeting with the likes of SBF — failing again and again to protect U.S. consumers & businesses. How many millions of taxpayer $ were wasted?! Feels good to finally be vindicated.”
Ripple’s Chief Legal Officer Stuart Alderoty was even more emphatic: “The SEC made a serious mistake going after Brad & Chris personally — and now, they’ve capitulated, dismissing all charges against our executives. This is not a settlement. This is a surrender by the SEC.” He noted that this marked Ripple’s third consecutive legal win, following the July 13 ruling that XRP is not a security as a matter of law, and the October 3 decision denying the SEC’s bid for an interlocutory appeal.
Market Reaction
Upon the news, XRP’s price jumped nearly 6% before retracing slightly, trading around $0.51 at the time of writing. The decision is widely seen as a major blow to the SEC’s aggressive enforcement campaign against the crypto industry. SEC Chairman Gary Gensler had previously expressed disappointment with the July ruling on retail XRP sales, but the dismissal of personal charges against Ripple’s top executives further undermines the regulator’s position. While the SEC may still pursue remedies against Ripple for institutional sales, the definitive end of the personal lawsuit against Garlinghouse and Larsen represents a significant milestone for the company and for broader crypto regulatory clarity.