Brad Garlinghouse, the CEO of Ripple and the co-founder Chris Larsen, have filed motions to dismiss the lawsuit filed against them by the United States Securities and Exchange Commission (SEC).
The two top executives at Ripple were accused of aiding and abetting the payment firm’s sales of the digital token XRP as an unregistered security.
As reported by U.Today, the lawyers representing the two executives argue that their transactions were majorly foreign. Although the SEC claimed that some of those who purchased XRP from them were located in the United States, Garlinghouse remains resolute in his motion that the regulatory agency failed to provide at least one transaction within the United States.
Likewise, lawyers representing Larsen pointed out that the SEC is not allowed to claim monetary relief by law:
“Despite investigating Ripple and Mr. Larsen for over two and a half years before filing its initial Complaint, obtaining Mr. Larsen’s XRP trading records, and having every opportunity to identify each offer and sale for which it seeks monetary relief, the SEC fails to allege any discrete XRP offers or sales.”
The two defendants asked the court to reject the allegations of violating Section 5. They claimed that since the plaintiff’s complaint has failed to allege any recklessness to prove that Garlinghouse and Larsen were breaking the law intentionally by selling the cryptocurrency.
In response to the motion to dismiss filed by the Ripple executives, Judge Analisa Torres of the United States District Court for the Southern District of New York issued an order for the SEC to file its opposing papers to the motions to dismiss by 14th May 2021. While the defendants will be given an opportunity to reply to the regulator’s opposing papers by 4th June 2021.