Chris Larsen, executive chairman of the embattled payments firm Ripple, has motioned to dismiss a case against him, as part of a wider action against the company and its senior officers being pursued by the U.S. Securities and Exchange Commission (SEC).
As per the letter, Larsen said the SEC cannot demonstrate he “knowingly or recklessly provided substantial assistance” towards any breach of s.5 of the Securities Act 1933, and that when he was CEO at Ripple, XRP was classified as a currency—by both the Justice Department and the Treasury Department’s Financial Crimes Enforcement Network (FinCEN).
The letter also said Larsen cannot be said to have taken steps to ensure the success of the sale of XRP, and in any event, the statute of limitations has already expired on Larsen’s involvement in Ripple back in 2013.
“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.”
A separate letter on behalf of Garlinghouse was also filed this week, offering two further grounds for dismissal of the case against him. As per the letter, Garlinghouse was simply acting in the role of his job as head of the company, rather than personally violating any securities laws.
The letters come as the latest twist in the long-running dispute between the SEC and Ripple and its executives, over the launch of its XRP token. While previously considered a currency by several U.S. agencies, the SEC now considers it to have been an unregistered security, which would find the firm and its officers in default of U.S. securities laws.
The legal battle continues.
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