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Ripple’s CEO Brad Garlinghouse blasted the SEC, accusing it of creating a “mess” by declaring itself the “cop on the crypto beat when it had no legal jurisdiction.”
Ripple CEO Brad Garlinghouse took to Twitter today to defend Judge Torres’ recent decision, which declared that Ripple’s sale of its XRP token did not constitute a sale of securities.
Ripple’s chief further blamed the SEC for creating the “mess” surrounding crypto regulation when it had no right to do so.
Garlinghouse Speaks Out Against SEC
Ripple’s partial victory against the SEC has been celebrated by most of the industry but has seen some backlash from the naysayers. Judge Analisa Torres ruled on July 13 the XRP token, concerning retail sales on digital asset exchanges, is not necessarily a security. Torres, however, did rule that XRP qualifies as a security under the Howey Test when sold to institutional investors.
At the time of the ruling, Garlinghouse commented that institutional sale represents “the smallest piece” of the suit and believes if the SEC decides to appeal the decision regarding retail sales, it would only “solidify” Torres’ decision. Garlinghouse further labelled the SEC a “bully” for targeting “weak players” in the industry without the necessary resources to build a strong defence.
The Ripple CEO continued his criticism of the agency in defence to retail consumers. He said:
“An important topic has come up about protecting retail. The SEC created this mess by proclaiming it was the cop on the crypto beat when it had no legal jurisdiction Where’s that gotten us? Consumers left holding the bag in bankruptcy court while the SEC holds press conferences.”
In the same thread, Garlinghouse defended Judge Torres’ application of the law, emphasizing “legislation – not more regulation by enforcement – is the only way to provide clear rules and protect retail.”
It’s absurd to blame a Judge for faithfully applying the law. We all know legislation – not more regulation by enforcement – is the only way forward to provide clear rules and protect retail. Glad to see more members of Congress like @RepRitchie, @PatrickMcHenry champion this.— Brad Garlinghouse (@bgarlinghouse) July 22, 2023
SEC May Appeal Decision But Will Take Years
While it has not clearly stated it would appeal Torres’ ruling, the SEC did hint at the possibility.
The Wall Street Journal (WSJ) reported that disgraced Terraform Labs co-founder, Do Kwon is trying to use the landmark ruling as precedence in his own battle against the securities agency. In a motion involving Kwon, the SEC urged the presiding judge not to seek guidance from the Ripple ruling. The SEC said Judge Torres’ decision “adds baseless requirements” to the Howey Test and stated there would be a “further review” of the ruling.
Prominent crypto and pro-Ripple lawyer John Deaton clarified the implications of a possible appeal by the SEC.
Deaton said on Twitter that he does not view a potential appeal as a setback to the industry.
An appeal is not even close to be a setback. First, it will be two years from now before a decision is issued by the 2nd Circuit, if it’s appealed. The Torres Decision is the law until then - at least in the 2nd Circuit. Second, even if the 2nd Circuit said Torres was wrong… https://t.co/GzW31D9edQ— John E Deaton (@JohnEDeaton1) July 22, 2023
Mr Deaton explained that a possible SEC appeal would take at least two years to come to fruition and said that until such a decision is revealed, Judge Torres’ ruling remains the law.
He assured nervous XRP holders,
“Don’t let anyone underestimate how significant this win is.”
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