Ripple Chairman Denies Knowing XRP Sales Could Be a Violation
After Garlinghouse, Larsen too files a motion to dismiss.
Key Takeaways
- Chris Larsen filed a “motion to dismiss” with the U.S. District Court for the Southern District to discharge him from the ongoing lawsuit.
- Larsen's lawyers said SEC failed to show Larsen was culpable for intentionally selling securities.
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Ripple’s executive chairman and ex-CEO, Chris Larsen, has demanded that the SEC dismiss its lawsuit.
Motion to Dismiss Ripple Lawsuit
Lawyers representing the former CEO of Ripple have filed a “motion to dismiss” with the U.S. District Court for the Southern District of New York to discharge him from the ongoing lawsuit.
Chris Larsen and current CEO Brad Garlinghouse first faced legal troubles when the American Securities and Exchange Commission (SEC) filed a legal complaint against them for selling unregistered securities worth $1.3 billion.
In a legal document submitted to Judge Analisa Torres, Larsen’s lawyers reasoned why the lawsuit was not valid. The motion to dismiss focused on a recently amended complaint in which the SEC charged Larsen and Garlinghouse for aiding and abetting Ripple’s violation of the Securities Act of 1933.
In the document, lawyers argue that to prove this claim of abetment, the SEC would need to prove Larsen’s intent or knowledge of wrongdoing, also called Scienter.
The document claimed Larsen had no knowledge that XRP sales constituted investment contracts, and the SEC failed to demonstrate that Larsen knew he was selling an unregistered security.
“The SEC has failed to plausibly allege that Mr. Larsen had the requisite state of mind for aiding and abetting under Section 15(b) of the Securities Act,” the document reads.
It is to be noted that besides Larsen’s personal appeal, Garlinghouse, who is the other defendant in the case, has also filed a similar motion to dismiss with the Court.
Disclosure: The author did not hold crypto mentioned in this article at the time of press.
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