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Ripple CEO Says Recent Ruling Was Complete Loss for SEC, Not Split Victory

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Sat, 15/07/2023 - 11:52
Ripple CEO Says Recent Ruling Was Complete Loss for SEC, Not Split Victory
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Ripple CEO Brad Garlinghouse maintains that the recent court ruling represents a complete loss for the SEC and not a split victory.

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Garlinghouse made these remarks in response to Fox Business correspondent Charles Gasparino, who hinted at a developing story on potential fines by Ripple to settle the part of the SEC case it lost.

The Ripple CEO maintained that the SEC lost on everything that matters, as several lawyers have noted, not just Ripple's. He added that any attempt by the SEC to paint the recent verdict as some sort of split victory is pathetic.

In December 2020, the SEC sued Ripple Labs, alleging that the sales of XRP constituted an unregistered security offering. So the main crux of the case was determining if XRP was a security.

Garlinghouse emphasizes this point by stating that the case was never about paying fines or penalties but rather about establishing that XRP was not a security. In this regard, he says Ripple won and the SEC lost. Thus highlighting the SEC's utter loss.

XRP "is not a security," according to a federal court decision issued on Thursday. This ruling applies to sales on exchanges or by executives, as well as other XRP distributions to developers, charities and employees.

This was one decision that Ripple and many in the crypto industry took as a huge win. The Court determined that past direct XRP sales to institutional clients totaling $729 million are the only thing that qualifies as an investment contract.

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Paul Grewal, the chief legal officer at Coinbase, identifies a misconception regarding the judge's decision after some pointed out a divided outcome in the Ripple case: "Don't be misled that Judge Torres ruled that sometimes XRP is a security and sometimes it isn't. That's exactly the opposite of what she ruled: XRP itself is never a security."

Grewal quotes a portion of the ruling to clarify the incorrect assumption: "XRP, as a digital token, is not in and of itself a contract, transaction, or scheme that embodies the Howey requirements of an investment contract."

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Following the recent ruling, Ripple CEO Brad Garlinghouse told Fox Business reporter Charles Gasparino that he would be interested in discussing the facts. He responded that the Court, not the SEC, will ultimately decide whether or not to impose any penalties.

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