Ripple CEO Brad Garlinghouse has filed a motion to dismiss the SEC’s amended complaint against him, calling it “regulatory overreach.”
The exec took to Twitter to announce his position on the SEC’s charges against him and Ripple Labs Inc. by sharing a link to the letter filed on his behalf, saying that “it speaks for itself.” According to the said letter, the SEC’s allegations against Garlinghouse fail on account of a number of reasons.
The same, addressed to U.S District Court Judge Analisa Torres, claimed,
“First, 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.”
The motion to dismiss, filed by Cleary Gottlieb Steen and Hamilton, also commented on the SEC’s amended complaint, while also expanding on the regulatory agency personally targeting Garlinghouse for the alleged violation of securities laws.
“Straining to impose personal liability on an executive like Mr. Garlinghouse for simply doing his job where he reasonably understood that his actions complied with the law represents an abuse of prosecutorial discretion that has sent a dangerous signal to entrepreneurs and will chill innovation.”
Garlinghouse was reported to have sold over 60% of his XRP holdings for approximately $159 million at the time of those transactions, leaving him with 200 million XRP tokens. While holding 200 million XRP tokens is a considerably long position, some members of the community feel that Garlinghouse selling a majority of his XRP is disingenuous on his part.
In fact, Ripple’s lawyers have argued that the SEC’s allegations with respect to Garlinghouse’s XRP sales are “vague,” with no particular reference to any of these transactions occurring within the United States.
“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,” they asserted.
XRP was trading at $0.4660 at press time, down by over 25% from a high of $0.6338 in February.