Ripple CEO Brad Garlinghouse believes that the United States Securities and Exchange Commission (SEC) will face a prolonged process before having the chance to appeal the ruling in its case against Ripple Labs. The ruling, delivered by U.S. district court Judge Analisa Torres on July 13, partially favored Ripple, stating that the XRP token is not a security when sold on retail digital asset exchanges. However, Torres also ruled that XRP is a security when sold to institutional investors, as it meets the conditions set in the Howey test.
During an interview with Bloomberg on July 15, Garlinghouse dismissed the significance of the institutional sales decision, considering it “the smallest piece” of the lawsuit. He believes that if the SEC were to file an appeal against the retail sales ruling, it would only further solidify Torres’ decision. Garlinghouse expressed optimism about the current legal status of XRP, stating, “As a matter of law, the law of the land right now is that XRP is not a security. Until there is an opportunity for the SEC to file an appeal, which would take years, frankly, we are very optimistic.”
Garlinghouse emphasized that this is the first time the SEC has lost a case in the crypto industry, calling out the regulatory body for being “a bully” and targeting players who couldn’t mount a proper defense. He also highlighted the negative consequences of the SEC’s actions on the crypto market, particularly the delisting of XRP by several U.S. exchanges, such as Coinbase and Kraken, due to uncertainty surrounding the case.
According to Garlinghouse, the SEC’s actions sowed confusion in the market, and they knowingly engaged in activities that would increase this confusion. He believes that the SEC’s approach not only hindered innovation but also demonstrated a focus on power and politics over sound policy and clear rules of the road. This has made it difficult for entrepreneurs and investors to participate in the U.S. crypto market and blockchain industry.
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Garlinghouse’s statement reflects his belief that the SEC’s loss in the Ripple case is a watershed moment for the industry. He sees this ruling as a signal for crypto innovation in the United States and hopes that it will encourage the development of clearer regulations and guidelines.
Overall, Garlinghouse remains optimistic about Ripple’s position and the legal status of XRP. He sees the court’s ruling as a major victory and a validation of Ripple’s claims that they were on the right side of the law. Furthermore, he believes that the SEC will face significant hurdles in the appeal process, potentially taking years before having the opportunity to challenge the decision.
As this legal battle between Ripple and the SEC continues to unfold, it will have significant implications for the crypto industry as a whole. The outcome of this case will not only shape the regulatory landscape for digital assets like XRP but also influence how regulators approach other cryptocurrencies in the future. The industry and market participants will closely monitor the developments in this case, as it has the potential to set important precedents and establish clearer guidelines for crypto businesses operating in the United States.
