The U.S. Securities and Exchange Commission (SEC) is pushing back against Ripple executives’ attempts to dismiss the charges against them.
The legal teams representing Ripple’s chief executive Brad Garlinghouse and executive chairman Chris Larsen recently argued that the SEC’s charges should be dismissed for a variety of reasons, chief among them that XRP is not a security. Garlinghouse’s lawyers say the charges represent “regulatory overreach, plain and simple.”
The SEC calls Garlinghouse’s effort to dismiss the charges a waste of “considerable litigant and judicial time and resources.”
- “Garlinghouse’s letter does not acknowledge or dispute two critical facts alleged in the SEC’s complaint: that he profited by more than $150 million from illegal sales of XRP, and that he knew, recklessly disregarded, or consciously avoided knowing that XRP could be found to be a security.”
- “In fact, Garlinghouse knew that XRP was under SEC scrutiny and took a risk as to whether the SEC would file an enforcement action seeking to hold him accountable. Having lost that gamble, Garlinghouse now seeks to blame the SEC for his own misconduct.”
Larsen’s lawyers also argue that the SEC has not sufficiently demonstrated that any of the XRP sales the executive benefitted from occurred in the U.S.
The SEC says that claim is “plainly at odds” with their allegations, asserting that the executive offered XRP for sale on Ripple’s website, sold XRP to U.S. purchasers, and advertised XRP to potential clients domestically.
The SEC filed its lawsuit against Ripple in late December, declaring that XRP is a security and accusing the San Francisco payments company of selling the crypto asset without proper authorization.
The regulatory agency also filed suit against Garlinghouse and Larsen, claiming the executives played significant roles in negotiating and approving Ripple’s institutional sales. The SEC also alleges that the pair adjusted sales targets depending on the price of XRP.