Blockchain-based payment protocol Ripple is preparing for a robust legal counteroffensive against the United States Securities and Exchange Commission (SEC) after a series of significant legal victories.
In a recent interview with CNBC, Ripple CEO Brad Garlinghouse revealed the company’s bold strategy in response to the SEC’s $770 million disruption lawsuit related to institutional sales of XRP.
THE LEGAL SAGA TOOK A DECISIVE TURNS WITH THREE CONSECUTIVE WINS FOR RIPPLE
First, on July 13, Judge Torres issued a landmark ruling, stating unequivocally that XRP does not qualify as a security.
This decisive victory allowed cryptocurrency exchanges to relist XRP, causing its price to surge above $0.80.
The momentum continued when Judge Torres rejected the SEC’s interlocutory appeal request and dismissed charges against Ripple executives Brad Garlinghouse and Chris Larsen.
Garlinghouse expressed elevated confidence in the wake of these victories, but criticized the SEC for what he perceives as repetitive and ineffective regulatory strategies.
He drew parallels with Grayscale’s success in the United States with a Bitcoin ETF, where a federal judge rebuked the SEC for its arbitrariness and capriciousness.
The CEO outlined Ripple’s anticipation of a positive turn in the legal battle, emphasizing the SEC’s deviation from its core mission of investor protection.
Ripple is set to challenge the SEC’s disgorgement claim, focusing on the judge’s future decisions regarding remedies, identifying harmed investors, and scrutiny of securities laws for institutional investors.
Despite Ripple’s celebrations, the refusal of an interlocutory appeal could be seen as a missed opportunity to speed up the legal process.
Garlinghouse’s criticism of the SEC’s approach as ‘insanity’ could find arguments in favor of the need for a strong regulatory stance to prevent potential abuses in the market.