February 19, 2021 | AtoZ Markets – In an updated complaint against Ripple, the US Securities and Exchange Commission (SEC) said Brad Garlinghouse and Chris Larsen played a "significant role" in organizing unreported sales and manipulating the price of XRP.
SEC files modified version of the lawsuit against Ripple
The SEC has filed an amended complaint against Ripple, its CEO Brad Garlinghouse and former CEO Chris Larsen. The new version of the lawsuit adds factual information about individual defendants - Garlinghouse and Larsen, who are accused of playing a "significant role" in organizing unreported XRP sales.
The SEC describes several cases where sales adjustments were used by Ripple executives to control the price of a crypto asset. For example, the commission said that the company's management manipulated the price of the token and sold 14.6 billion XRP worth more than $1.38 billion.
The updated lawsuit also mentions that some of Garlinghouse and Larsen's personal XRP sales took place in the United States:
"Garlinghouse's XRP sales have taken place on a variety of digital asset trading platforms, including platforms A and B, as well as at least two others registered in the US and one registered overseas, but with a primary location in New York."
Garlinghouse sold over $159 million worth of XRP between April 2017 and October 2019. Meanwhile, Larsen and his wife made over $450 million in cryptoasset sales from 2015 to March 2020.
How it all started
Recall that in December 2020, the SEC filed a lawsuit against Ripple, accusing it of selling unregistered securities in the form of tokens for $1.3 billion. Garlinghouse and Larsen were also defendants.
Ripple's CEO said the company has always worked in partnership with regulators. In his opinion, this lawsuit is a " terrible precedent " for the entire cryptocurrency industry.
In January 2020, Ripple's lawyers asked the commission for information on why it does not classify Bitcoin and Ethereum as securities.
Amid SEC claims, major platforms have delisted and suspended their support for the XRP token. These include Coinbase and Binance.US, Galaxy Digital, Bitstamp, B2C2, eToro, and Kraken.
Management company 21Shares has excluded the Ripple token from its traded exchange products. Bitwise Asset Management has removed it from its flagship index fund.
In late January 2021, a Florida resident sued Ripple Labs and Garlinghouse. In the applicant's view, the defendants violated state securities and illegal enrichment laws.
Tetragon Financial Group also filed claims against the company, which in 2019 led a $200 million Series C funding round.
We will remind, representatives of the SEC and Ripple doubted the possibility of pre-trial settlement of the claim. Preliminary hearings in the case are scheduled for February 22.
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