In a big development for the cryptocurrency industry, Ripple Labs CEO Brad Garlinghouse announced that the US Securities and Exchange Commission (SEC) has officially dropped its case against the blockchain payments company.
SEC Drops Case Against Ripple
In a four-minute video shared on social media, Garlinghouse declared, “I’m finally capable of announce, this case has ended, it’s over.” He emphasized that the SEC’s case, initiated under the leadership of former Chair Gary Gensler, was destined for failure from the beginning. Garlinghouse characterised this moment as a big victory, describing it as a “long overdue give up” by the SEC.
Garlinghouse further criticized Gensler, who resigned on January 20, the identical day President Donald Trump took office, for his aggressive stance against the cryptocurrency sector.
Ripple’s CEO claimed that the SEC under Gensler sought to intimidate the whole industry, using arguments much like those employed within the Ripple case.
The SEC had alleged that Ripple and its executives raised over $1.3 billion through an unregistered ongoing securities offering involving the sale of XRP. Based on the lawsuit filed 4 years ago, Ripple had been selling XRP since 2013 without registering the asset as a security, thereby violating federal securities laws.
Major Asset Managers Eye XRP ETF Approval
With the case now resolved, Garlinghouse asserted that XRP is not any longer viewed as a security under the Howey Test, a critical legal standard used to find out whether certain transactions qualify as investment contracts.
This clarity will not be only essential for regulatory compliance but in addition supports the approval of XRP exchange-traded funds (ETFs) which have been filed by major asset managers looking for regulatory green lights this 12 months.
This victory comes because the SEC, now under the acting chair Mark Uyeda, appears to have shifted its stance, aligning more with the present administration’s deal with fostering innovation within the digital asset space.
In response to the news, XRP’s price surged nearly 12%, climbing back above the $2.4 mark after experiencing a dip to $1.7 during February’s market sell-off.
Featured image from DALL-E, chart from TradingView.com
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