Ripple's executive chairman moves to dismiss SEC lawsuit

Chris Larsen — Ripple’s executive chairman — has joined company CEO Brad Garlinghouse in moving to dismiss the securities violation case filed by the U.S. Securities and Exchange Commission.

In a court letter filed on Wednesday, Larsen’s attorneys provided four arguments detailing the reasons why the case against the Ripple executive should be struck.

According to the letter, the SEC cannot substantiate its claims that Larsen “knowingly or recklessly provided substantial assistance” towards the violation of Section 5 of the Securities Act of 1933.

Arguing further, the letter stated that in 2015, when Larsen bore the designation of Ripple CEO, both the Justice Department and the Treasury Department’s Finance Crimes Enforcement Network classified XRP as a currency.

Building on this line of argument, Larsen’s legal team also declared that the Ripple executive cannot be said to have taken actions to ensure the success of XRP sales.

In its fourth line of argument, the letter stated that the statute of limitations has run out on any alleged involvement of Larsen in the sale of XRP since 2013, adding:

“Because the SEC has alleged that the sales of XRP over a multi-year period constituted only one offer, which began in 2013, the statute of limitations began to run in 2013 and expired in 2018.”

In a separate letter also filed on Wednesday, Garlinghouse’s attorney Matthew C. Solomon offered two arguments in favor of dismissing the case against the Ripple CEO.

Echoing Larsen’s attorneys, Solomon wrote to Judge Analisa Torres of the U.S. District Court for the Southern District of New York stating that FinCEN has previously classified XRP as a virtual currency.

Garlinghouse’s legal representative also panned the SEC’s case against the Ripple CEO for personally violating securities regulations. According to Solomon, Garlinghouse’s activities concerning the sale of XRP tokens were simply part of this job as head of the company.

As previously reported by Cointelegraph, the SEC filed an amended complaint with the court back in February, accusing Ripple executives of misleading investors and manipulating the price of the XRP “coin.”

Both the SEC and Ripple have previously stated that a pre-trial settlement was not on the agenda.