In a letter received by Federal Judge Analisa Torress, Ripple CEO Brad Garlinghouse has expressed his intentions to dismiss the lawsuit filed against him by the U.S. Securities and Exchange Commission in December.
Where the previously filed allegations against Brad Garlinghouse and the ex-CEO Chris Larsen accused both the executives to have manipulated the XRP market with their sales, the lawyers representing Garlinghouse have claimed that the lawsuit has entirely failed at understanding “the economic realities” of XRP sales, stating the amended form of the lawsuit as “fares no better”.
Alienation with Economic Realities
Penned by the Lawyers representing Garlinghouse, the letter states the litigation filed against the CEO as “regulatory Overreach”. The lawyers expressively believe that the lawsuit is insufficient of the alleged intent or the understanding of the claimed questionable actions.
“The SEC has the burden to demonstrate that Mr. Garlinghouse either knew or recklessly disregarded that he was associating himself with something “improper” and nonetheless “substantially assisted” Ripple in committing that violation.“
Picking up on the lawsuit filed against Ripple and its executives by the SEC that alleged XRP to be unregistered security, Ripple has strutted towards the long-awaited debate about XRP being recognized as a virtual currency by the Financial Crimes Enforcement Network (FinCEN), back in 2015. However, little could be said at the time, since the FINCEN’s own guidance clearly states that under federal security laws, a virtual currency can also be qualified as security.
Sales were on Foreign Exchanges
The letter to the Federal Judge also points to the lack of accuracy in the SEC’s judgement in observing Garlinghouse’s transactions of XRP in the US.
“The SEC cannot save its pleadings by arguing that Mr. Garlinghouse’s offers or sales are domestic simply because either he or XRP purchasers (the location and identity of which Mr. Garlinghouse was unaware) may have been physically present in the United States at the time of the transactions.”
Where the amended complaint did state that the token sale by Brad Garlinghouse took place on at least four United states incorporated exchanges, the lawyers have claimed in the letter that a vast majority of the sales were actually conducted on foreign exchanges.