Ripple CEO Brad Garlinghouse anticipates a protracted process before the United States Securities and Exchange Commission (SEC) can file an appeal against Judge Torres’ favorable ruling in the case involving Ripple. On July 13, Judge Torres issued a partial victory for Ripple Labs by deeming that the XRP token is not a security concerning retail sales on digital asset exchanges. However, the judge concluded that XRP qualifies as a security when sold to institutional investors, meeting the conditions outlined in the Howey Test.
During an interview with Bloomberg on July 15, Garlinghouse emphasized that if the SEC were to appeal only the retail sales aspect, it would further solidify Judge Torres’ decision. He highlighted that the SEC’s filing of an appeal could take years, given the legal procedures involved. Garlinghouse expressed considerable optimism since, according to existing law, XRP is presently not classified as a security. This marks the first instance of the SEC losing a cryptocurrency-related case, in his opinion.
Garlinghouse attributed the SEC’s previous successes to targeting weaker players who lacked the resources to mount a robust defense. He also noted that when the lawsuit against Ripple was initially filed, several U.S.-based crypto exchanges adopted a cautious “wait-and-see” attitude due to the regulatory uncertainty created by the SEC.
Garlinghouse argued that the SEC intentionally cultivated confusion in the market, impeding innovation in the United States. He criticized the commission for prioritizing power and politics over sound policy, preventing entrepreneurs and investors from participating in the burgeoning crypto and blockchain market. He believes that providing clear regulatory guidelines is crucial to fostering growth and ensuring the success of crypto and blockchain technologies.
The outcome of the Ripple case has significant implications for the cryptocurrency industry and regulatory landscape. Garlinghouse expressed gratitude to all those who supported Ripple throughout the legal proceedings, emphasizing that the decision holds broader significance for crypto innovation in the United States.