At the recent Singapore Token2049 conference, Ripple CEO Brad Garlinghouse spoke with Bloomberg’s Annabelle Droulers about the ongoing appeal by the Securities and Exchange Commission (SEC) regarding a court decision made by Judge Analisa Torres. Garlinghouse expressed his frustration with the SEC’s persistence, highlighting the significant financial toll the case has taken on Ripple, with the company having reportedly spent “well over $100 million” in legal fees.
Despite the challenges, Garlinghouse remains optimistic about the outcome of the case. He noted that the judge has already stated clearly that XRP is not a security. However, the SEC’s request for permission to appeal is not about whether XRP is a security, but rather about the presence of an investment contract under certain circumstances. Garlinghouse believes that as the case progresses through the appellate court system in the United States, the chances of a favorable outcome for Ripple increase. He stated, “Because I think as you go up the appellate court system in the United States, you actually get more conservative, and I think this bodes well. And I said it a long time ago: The facts are on our side, the law is on our side. And we will continue to fight in court.”
When asked about the future of crypto companies in the US, Garlinghouse acknowledged that it is currently a tough spot, but he does not believe it is permanently shut. He emphasized the significance of the US in the global economy, accounting for 22% of global GDP. Garlinghouse anticipates potential shifts in the regulatory landscape with a new administration and believes that Congress will eventually be compelled to act.
Garlinghouse also pointed out the SEC’s recent losses in court, including a decision related to the Grayscale ETF conversion. He highlighted the fact that judges have used harsh language about the SEC, stating that the agency has been arbitrary and capricious. These losses in court reflect poorly on the SEC’s approach and may influence the outcome of Ripple’s case.
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In addition to the legal battle, Garlinghouse revealed during the interview that over 80% of Ripple’s hiring this year will be outside the US. This decision is a consequence of the protracted legal dispute with the SEC. Garlinghouse praised jurisdictions like Singapore, Hong Kong, the UK, and Dubai for their proactive approach to crypto regulation, stating that these governments are partnering with the industry and providing clear rules, which in turn fosters growth.
The SEC, under Chair Gary Gensler, has taken a stringent stance on cryptocurrencies, especially after market disruptions in 2022, such as the collapse of the FTX exchange. Gensler believes that most tokens are securities and should be under the SEC’s regulatory oversight. Meanwhile, Congress’s efforts to provide clarity on the status of crypto have been slow, leaving many companies uncertain about the regulatory environment in the US.
As of now, XRP is trading at $0.4779, reflecting the ongoing uncertainty surrounding the legal battle between Ripple and the SEC. The outcome of this case will have broader implications for the crypto industry and its regulatory landscape.
In conclusion, despite the challenges posed by the ongoing legal dispute with the SEC, Ripple CEO Brad Garlinghouse remains optimistic about the outcome. He believes that the judge’s clear statement that XRP is not a security bodes well for Ripple’s case as it progresses through the appellate court system. Garlinghouse also discusses the potential future of crypto companies in the US, highlighting the importance of regulatory clarity and the need for Congress to take action. Additionally, he praises other jurisdictions for their proactive approach to crypto regulation, which has led Ripple to increase hiring outside the US. The SEC’s recent losses in court and its stringent stance on cryptocurrencies further add to the uncertainty surrounding the regulatory environment.
