Ripple Labs CEO Brad Garlinghouse shared in an interview during the “Redefine Tomorrow 2023” summit that he anticipates a court ruling on the US Securities and Exchange Commission’s (SEC) lawsuit against Ripple “in weeks, not months.” The SEC filed a legal action against Ripple in 2020, alleging the company violated regulations by raising more than $1.3 billion in ongoing digital asset sales without registering the XRP cryptocurrency as a security. Ripple has contested the allegations and stated that XRP is a currency and not a security.
Ripple’s CEO Believes Outcome Will Be Favorable
During the interview, Garlinghouse emphasized that 95% of Ripple’s customers are non-US and that he would not establish the company in the United States if given a chance following the current regulatory landscape. Garlinghouse and co-founder Chris Larsen filed a motion to dismiss the SEC’s case in March, arguing that the lawsuit’s foundation is flawed and that XRP is a currency that works independently of Ripple, not a security. The SEC has accused Ripple of repeatedly performing illicit securities offerings. Ripple blamed the SEC for inflicting “multi-billion dollar losses” on XRP investors due to the lawsuit.
The outcome of this case could set a precedent for how the US governs digital assets. A ruling in favor of Ripple could provide further clarity and pave the way for broader adoption of cryptocurrency. In contrast, if the SEC prevails, it could subject other cryptocurrencies to greater regulatory scrutiny, prompting them to be included as securities.
In a Bloomberg interview on March 2, Garlinghouse stated that the case is “pivotal for the whole industry” and voiced his hopes that the court will reach a verdict by the end of this year. The CEO believes that XRP is not a security and that the US needs to define clearer regulations for digital assets. Garlinghouse contends that the SEC’s recent increase in cryptocurrency enforcement actions places the US behind other countries regarding productive cryptocurrency regulation.
Some members of the cryptocurrency community interpret Garlinghouse’s expectation of a ruling in the coming weeks as an indication that he believes the decision will be in Ripple’s favor, suggesting that the court regards Ripple’s arguments seriously and that the SEC’s case is flawed.
Featured image from Unsplash, chart from TradingView.com
