SEC alleges that Ripple executives recklessly disregarded facts

John Deaton, the founder of CryptoLaw and a supporter of the blockchain, believes the SEC will lose its motion for summary judgment challenging the recklessness of Ripple CEO Brad Garlinghouse and co-founder Chris Larsen in failing to recognize that XRP was a security.

He bases this on a crucial fact: During three meetings with the SEC, Ripple CEO Brad Garlinghouse, they never once mentioned that “XRP is a security.” “The fact that BG (Brad Garlinghouse) met 3X with the SEC and never once did they say ‘XRP is a security’ is evidence a reasonable jury could conclude he wasn’t reckless,” Deaton stated.

The SEC sued Ripple and two of its executives in December 2020: co-founder Christian Larsen and CEO Bradley Garlinghouse.

The SEC alleges that the Ripple executives recklessly disregarded the facts, which “allegedly made XRP amount to the unregistered sale of securities.” Deaton examined the evidence to prove that the Ripple executives were not careless as the SEC had asserted.

He provided some information in a series of tweets, including the following: in 2013, Ripple co-founder Chris Larsen spoke before the SEC, CFTC, and other regulatory bodies about Ripple’s aspirations to use XRP to disrupt the world payment system. Then, in 2014 and 2015, the USGAO and FinCEN and the DOJ designated XRP as a “virtual currency.” He asserts that the Ripple executives would be the ones to receive summary judgment in the case since no reasonable jury could find that they were careless. But he thinks a jury will likely decide the case against the Ripple executives. The individual defendants’ request to have the case against dismissed them was turned down in March 2022.

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