Brad Garlinghouse, Chief Executive Officer of the crypto company, Ripple, and Chairman, Charis Larsen, have asked U.S. courts to dismiss the U.S Securities and Exchange Commission’s (SEC) lawsuit against it. The SEC had previously filed a lawsuit against Ripple and its executives, stating that the cryptocurrency organization illegally sold over $1 billion in digital securities.
SEC also made claims that the aforementioned executives were influencing market prices of the XRP by regulating the sales and distribution of the XRP depending on the market condition. This, they said, ultimately resulted in the enrichment of the executives to a tune of over $600 million.
Consequences of Ripple’s Legal Battles
Since its arrival into the cryptocurrency industry, Ripple’s XRP token has experienced massive growth. At one time the cryptocurrency was named among the top four cryptocurrencies according to market cap, a feat which was only toppled by Polkadot in January.
However, due to the SEC’s initial lawsuit filed last year, the cryptocurrency has witnessed a steady decline, with many decentralized exchanges delisting the XRP in their list of exchanges. A notable setback happened recently, when MoneyGram ended their almost two years old partnership with the crypto company.
Ripple’s Stance on Lawsuit Dismissal
While the SEC had argued that the XRP was an illegal security, the Ripple executives have brought forward a counter argument. In their legal letter to Judge Analisa Torres of the U.S. District Court overseeing New York’s Southern district, they claimed that Ripple’s XRP was a cryptocurrency, not a security, and as such, the SEC does not have the legal rights to sue them.
In addition to other arguments, the organization’s legal team has said that the SEC have failed to show that transactions occurred in the U.S, and that since the Securities act only applies in the U.S, the SEC doesn’t have jurisdiction over the matter.
Meanwhile, former SEC executive, Joseph Hall, had earlier said that the SEC may lose its case against Ripple, since the Howey test used by the commission cannot accurately tell if a digital asset may be regarded as a security or not.