Ripple CEO Garlinghouse Takes On SEC, Calls Them A ‘Bully’ In Wake Of XRP Ruling
Ripple CEO Brad Garlinghouse has stated that the recent federal court ruling has confirmed that XRP is “not a security”. The ruling provides the digital payments company with greater flexibility to pursue various business opportunities across the globe.
Speaking on Bloomberg TV, Garlinghouse expressed relief that the company could now promote the various use cases for Ripple and its technology without the fear of regulatory action.
Ripple CEO Calls Out SEC For Anti-Crypto Stance
The ruling signifies a win for the crypto industry over the US Securities and Exchange Commission (SEC), which sued Ripple in late 2020. The SEC accused the firm, co-founder Chris Larsen, and Garlinghouse of misleading investors by selling more than $1 billion worth of tokens without registering them.
US District Judge Analisa Torres in New York ruled that the company’s $729 million sales of XRP tokens to sophisticated investors met the test for an investment contract under federal securities law. However, this did not apply to hundreds of millions sold to the broader public through exchanges.
Garlinghouse called the SEC “a bully” and celebrated the ruling as the first time the agency lost a crypto case. The agency is expected to appeal the decision, but any appeals could take years. He further claimed:
This is a win for Ripple. It’s also a win for the entire crypto industry.
The ruling’s duality rests on the fact that retail buyers had no idea where their money was going or what it was being used for in many instances, in contrast to sophisticated institutions. The question remains whether this logic will gain ground in other legal battles or survive possible appeals.
One potential implication is that other cryptocurrencies deemed securities by the SEC may have the opportunity to challenge that classification in court. If other cryptocurrencies can prove that they are not securities and do not fit the legal definition of investment contracts, it could open up new opportunities for innovation and growth.
The Ripple ruling could also lead to increased scrutiny of other cryptocurrencies by the SEC and other regulatory bodies. The SEC has already indicated that it will continue to review the decision and take appropriate action to protect investors.
On the other hand, the ruling could also lead to increased adoption of cryptocurrencies by institutional investors, who have been hesitant to invest in assets that are deemed securities. With more clarity on the regulatory status of cryptocurrencies, institutional investors may be more willing to invest in cryptocurrencies, leading to increased liquidity and market capitalization.
The SEC spokesperson Scott Schneider stated that the agency was “pleased that the court found that XRP tokens were offered and sold by Ripple as investment contracts in violations of the securities laws.” The regulator was continuing its review of the decision.
Overall, the ruling has significant implications for the digital asset industry, providing greater clarity on the regulatory status of cryptocurrencies and paving the way for further innovation and adoption.
Featured image from Twitter, chart from TradingView.com
