Garlinghouse And Larsen To File Motion To Dismiss SEC Lawsuit

Garlinghouse and Larsen from Ripple will file a motion to dismiss the SEC lawsuit as the lawyers representing them said, asking the US court to dismiss the lawsuit already so let’s read more in our latest Ripple news.

Ripple’s CEO Brad Garlinghouse and Larsen Chris, appealed to judge Analisa Torres by filing two separate motions to dismiss the SEC amended complaint against Ripple and its executives. In a letter from March 3, the Attorneys representing Garlinghouse stated that the lawsuit filed by the SEC against Ripple was a regulatory overreach. They argued that the SEC allegations failed based on a few reasons as the letter read:

 “The SEC fails to recognize the economic realities of Defendants’ transactions in XRP, the XRP market, and Ripple’s business, each of which exhibits none of the traditional characteristics of an investment contract under SEC v. W.J. Howey Co.”

The Howey Test is used by the SEC to determine whether an asset has the needed qualities of security and the regulatory body argued that XRP has all of the characteristics of a security. However, the executives maintained that XRP is a virtual currency which was confirmed by the Justice Department and FinCEN. The filing remarked on the recent amended complaint that was filed by the SEC before the pretrial hearing which alleged that Brad Garlinghouse violated securities laws by selling his holdings through Ripple.

Garlinghouse sold more than 60% of his XRP holdings that were worth $159 million at that time which was a move that spiked controversy among members of the crypto community. The attorneys representing him asserted that the SEC complaints were baseless because there’s no proof to show that these transactions occurred within the US.
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They said:

 “the truth is that the vast majority of Mr. Garlinghouse’s XRP sales were made on foreign exchanges, and those transactions do not and cannot violate the federal securities laws.”

In the meantime, Chris Larsen’s lawyers said in a letter that the regulator failed to “State a claim against Mr. Larsen” but the lawsuit against their client should be dismissed. The conclusion of the SEC lawsuit will affect the way cryptos are regulated and seen. The CEO stated previously that this case is an “assault on crypto at large” and that Ripple will not let the SEC bully the industry.