Ripple continues making progress, with several significant legal victories against the SEC. Technically, the XRP price appears to have bottomed, but momentum still seems weak. Here is an update on the key developments between Ripple and the SEC:
The SEC v. Ripple case is a court case in the United States Southern District Court of New York. In December 2020, the SEC filed a complaint against Ripple Labs, Inc. and two of its executives, Bradley Garlinghouse and Christian Larsen, alleging the unregistered offer and sale of XRP, a digital token, as a security. The SEC accused Ripple of illegally raising more than $1.3 billion in an unregistered securities offering by selling XRP.
In July 2023, U.S. District Judge Analisa Torres granted summary judgment to Ripple on claims by the SEC that it peddled unregistered securities through sales to retail investors on digital asset exchanges. Those investors, Torres reasoned, did not know that Ripple was on the other side of the trades, so they could not have expected that Ripple would use their money to boost the value of the tokens. But the judge reached a different conclusion about Ripple’s XRP sales to sophisticated institutional investors. Ripple pitched those investors on its plans to make XRP an indispensable mode of blockchain payment. So, according to Torres, when Ripple sold XRP to those investors, it was engaged in securities transactions under the U.S. Supreme Court’s longstanding Howey test.
In July 2023, Judge Torres granted Ripple a partial win in the case, finding that sales of XRP on public exchanges were not unregistered securities offerings. Torres subsequently rejected a request by the SEC to appeal that ruling. She also ruled partly in the SEC's favor, saying the agency had shown the company's $728.9 million of XRP sales to hedge funds and other sophisticated buyers had violated the law. The SEC's claims against Garlinghouse and Larsen over their role in those sales were to be tried before a jury.
On October 19, 2023, the SEC dropped claims against two Ripple Labs executives, Brad Garlinghouse and Chris Larsen, in its lawsuit alleging the blockchain company violated U.S. securities law. The agency said in court papers it is dropping claims that Ripple Chief Executive Brad Garlinghouse and co-founder Chris Larsen aided and abetted sales of the cryptocurrency XRP which a judge has found amounted to unregistered sales of securities.
In summary, Ripple has had some wins in the case, with Judge Torres ruling in their favor on some claims and the SEC dropping claims against two Ripple Labs executives. However, the case is not yet over, and two defendants still await trial and final judgments on aiding and abetting the offerings.