The U.S. Securities and Exchange Commission (SEC) has officially dropped its personal lawsuit against Ripple CEO Brad Garlinghouse and co-founder Chris Larsen, marking a major reversal in the agency’s multi-year enforcement campaign. In a joint filing with the U.S. District Court for the Southern District of New York, the SEC agreed to dismiss all claims against the two executives “with prejudice and without costs or fees to either party.”
SEC Capitulates After Targeting Executives Personally
The SEC had charged Garlinghouse and Larsen with aiding and abetting Ripple’s alleged violations of securities laws, specifically regarding institutional sales of XRP. In a letter to Judge Analisa Torres on Thursday, the SEC stated that the dismissal “obviates the need for the scheduled trial” and renders the October 2 scheduling order moot. The regulator also noted it would work with Ripple to propose a briefing schedule concerning appropriate remedies for the company’s Section 5 violations in institutional XRP sales, with a deadline of November 9.
Ripple Calls It “a Surrender by the SEC”
Ripple CEO Brad Garlinghouse took to social media platform X to celebrate: “The SEC repeatedly kept its eye off the ball while secretly meeting with the likes of SBF [Sam Bankman-Fried] — 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 blunt: “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.” Alderoty highlighted that this victory marks Ripple’s “3 consecutive wins,” following the July 13 ruling that XRP is not a security and the October 3 decision denying the SEC’s interlocutory appeal.
Market Reaction: XRP Spikes
Following the announcement, XRP’s price surged nearly 6% before undergoing a slight retracement. At the time of writing, XRP was trading around $0.51. The dismissal is widely seen as a blow to SEC Chair Gary Gensler’s aggressive enforcement strategy toward the crypto industry. While the case against Ripple itself regarding institutional sales continues, the removal of personal liability for its top executives removes a significant overhang and could embolden other crypto firms to challenge SEC overreach. Observers now await the next phase of litigation, but for Ripple, today’s outcome is a clear legal and reputational win.