- Brad Garlinghouse and Chris Larsen are seeking to dismiss claims in the XRP lawsuit by hiring attorneys, while the SEC has requested the Second Circuit Court to set January 15, 2025, as the deadline for its principal brief in the appeals process.
- The SEC has recently filed an appeal that includes securities law violation charges against both Garlinghouse and Larsen.
In the ongoing legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC), Ripple executives Brad Garlinghouse and Chris Larsen have taken strategic steps to dismiss the SEC’s claims against them.
The legal dispute between Ripple and the SEC, which started in 2020, reached a pivotal moment in July 2023. At that time, District Judge Analisa Torres ruled that Ripple’s institutional sales of XRP were considered an unregistered securities offering.
However, she concluded that sales made to retail customers did not qualify as securities based on the Howey test criteria. Following this ruling, the SEC filed an appeal last week, aiming to challenge and reverse certain aspects of the judge’s decision.
Ripple’s Executives Take Action Against SEC Allegations
Garlinghouse and Larsen have hired key attorneys, including Matthew Solomon from Cleary Gottlieb, who is known for his expertise in securities law. They aim to challenge the charges brought by the SEC, which alleges that Ripple’s XRP token was sold as an unregistered security. In parallel, the SEC has requested the Second Circuit Court to set a deadline of January 15, 2025, for its principal brief related to the appeals. This indicates that the SEC is preparing to continue its pursuit of regulatory actions against Ripple.
John Deaton, a lawyer representing XRP holders, filed as a non-admitted attorney in the case. He can participate in discussions but may have limitations on formal representation within the appeals process.
Additionally, the law firm Paul, Weiss, Rifkind, Wharton & Garrison has officially ceased representing Chris Larsen. This change occurred on the same day the appeals court notified the cofounder about his failure to submit a notice of appearance, which is required for legal proceedings.
Following the departure of Paul Weiss, Larsen will now be represented by the same legal team that previously defended Ripple’s CEO. This new team includes attorneys from Cleary Gottlieb. The legal team, which includes attorneys from Cleary Gottlieb, previously achieved a significant victory by obtaining the dismissal of all claims against Ripple CEO Brad Garlinghouse in the SEC lawsuit.
Meanwhile, Ripple is challenging the watchdog’s definition of an “investment contract.” The company argues that for an investment contract to exist, there must be: A formal contract in place, Post-sale obligations from the seller, and Profits that depend on the seller’s efforts.
In response to these legal developments, XRP’s price saw a 1% increase within a 24-hour period, trading at approximately $0.5255. Additionally, there was a notable increase of 61% in XRP’s trading volume over the past day settling at $ 972 million, suggesting heightened interest and activity among traders.
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