While Ripple’s legal woes continue to cast a shadow over the future of the company and XRP, an attorney representing Chris Larsen, the firm’s Co-founder and Executive Chairman, has filed a motion to a US federal judge in which he requests the case against him to be dismissed. The lawyer argued the US Securities and Exchange Commission (SEC)’s claims against Larsen are barred by the five-year statute of limitations, and as such, they should be dropped.
The “SEC has alleged that Mr. Larsen’s sales were part of a single ‘ongoing’ Section 5 violation that began in 2013,” Martin Flumenbaum, Partner at the New York-based law firm Paul, Weiss, Rifkind, Wharton and Garrison, said in the motion addressed to Judge Analisa Torres of the Southern District of New York.
Last December, the SEC initiated legal action against the San Francisco-based blockchain company and two of its executives, Larsen and CEO Brad Garlinghouse. Ripple has rejected the regulator’s allegations of violating US securities laws by selling about USD 1.3bn worth of XRP since 2013.
“Having attempted to plead a single, ongoing violation, however, the SEC has conceded that the entirety of its request for monetary penalties and disgorgement against Mr. Larsen is time barred. It is now well-settled that the five-year limitations period of 28 U.S.C. § 2462 applies to any SEC claim for monetary relief, including disgorgement,” said the lawyer.
For the above reasons, the attorney claimed that a “claim for a Section 5 violation accrues under § 2462 on the date when the relevant sale of securities occurs. 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.”
According to Flumenbaum, the motion joins in the arguments set forth in an earlier letter in which Garlinghouse’s lawyers also asked for the case to be dismissed.
As reported in February, counsels for the SEC, Ripple, and two its executives “do not believe there is a prospect for settlement at this time.”
At the time of writing (12:08 PM UTC), XRP, ranked 7th by market capitalization, trades at USD 0.452 and is down by almost 2% in a day and 7% in a week. It rallied by 22% in a month and 93% in a year.
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