Ripple CEO Criticizes US SEC Over Recent Appeals Push
Ripple Labs Inc. CEO, Brad Garlinghouse, has taken a strong stance against the United States Securities and Exchange Commission (SEC) over its enforcement tactics. The legal battle between the SEC and Ripple has now been further prolonged due to the regulator's recent appeal filings.
Brad Garlinghouse's Criticism
The rift between Ripple and the SEC dates back to December 2020 when the SEC accused Ripple of selling XRP as securities to investors. As the case progressed, the distinction between sales to retail and institutional investors became apparent.
In a July 2023 ruling, Judge Analisa Torres ruled that XRP sales on secondary platforms did not qualify as securities offerings. However, she found that Ripple had violated federal laws by selling the coin to institutional investors. This decision resulted in a lengthy settlement hearing where Ripple was fined $125 million, as reported by a CNF report.
Despite the partial victory for Ripple, the SEC's recent appeal has prolonged the legal process, much to Brad Garlinghouse's dismay. Garlinghouse criticized the SEC for its apparent disregard for the rule of law, stating that if the regulator truly cared about the law, they would accept defeat and move forward.
Garlinghouse tweeted, "If Gensler and the SEC cared about the rule of law, they would accept their loss and move on. But they are not interested in faithfully applying the law or in providing clarity to industry players in the US."
He further criticized the SEC under Chairman Gary Gensler, accusing them of causing chaos and showing no concern for innovation and technology in the US. Garlinghouse believes that under the current leadership, the SEC is solely focused on disrupting the market.
The Ripple Labs Cross-Appeal
Ripple Labs has now officially filed a cross-appeal against the SEC, signaling its commitment to challenging the regulator. This move is part of Ripple's strategy to end the SEC's regulation-by-enforcement approach.
While the timeline for a potential hearing is unclear, there is growing speculation within the community about the outcome. Ripple's Chief Legal Officer, Stuart Alderoty, emphasized that with the cross-appeal, Ripple aims to address all key points that led to the SEC's appeal.
Alderoty stated, "The SEC lost on all key points – that's why they appealed. Today, Ripple filed a cross-appeal to ensure nothing's left on the table, including the argument that there can't be an 'investment contract' without essential rights and obligations found in a contract."
Besides Ripple Labs, other cryptocurrency firms have also taken legal action against the SEC. Crypto.com sued the commission, alleging overreach in declaring all cryptocurrency investment contracts. Bitnomial is challenging the SEC's claims regarding its proposed XRP Futures product.
Conclusion
The ongoing legal battle between Ripple and the SEC continues to generate controversy in the cryptocurrency industry. Ripple's CEO, Brad Garlinghouse, remains vocal in his criticism of the SEC's tactics, while the cross-appeal signifies the firm's resolve to challenge the regulator head-on.
As the legal proceedings unfold, the outcome will have significant implications for both Ripple and other cryptocurrency firms operating under the scrutiny of the SEC. The community eagerly awaits further developments in this high-stakes confrontation.
