To the dismay and frustration of Ripple supporters and the broader crypto industry, the United States Securities and Exchange Commission (SEC) has filed an appeal against the court’s ruling in July 2023, stating that programmatic sales of XRP are not considered securities. Following this new appeal, Ripple’s Chief Executive Officer (CEO), Brad Garlinghouse has fired back at the SEC for its “irrational” decision.
Ripple CEO Slams SEC For Court Appeal
On October 2, 2024, the SEC shocked the crypto community with its new appeal against Judge Analis Torres’ ruling in July 2023 that states that programmatic XRP sales are not securities. The news revealed by Defense lawyer, James K. Filan in an X (formerly Twitter) post was met with displeasure by Garlinghouse and the XRP community.
Garlinghouse took to X on the same day of the regulator’s appeal to express his discontent over the SEC’s decision to continue their legal pursuit against the company. The Ripple CEO criticized the SEC, declaring that the agency was “irrational,” and highlighting that if they were indeed logical, they would have moved on from the extended court case a long time ago.
He argued that the SEC’s legal actions against Ripple, and its new appeal against the court’s ruling have done more harm than good, damaging the regulator’s credibility and harming the investors they seek to protect. “Somehow, they still haven’t gotten the message: they lost on everything that matters,” Garlinghouse stated.
Despite the disappointing appeal, Garlinghouse has asserted that Ripple, the broader crypto industry and the rule of law have already succeeded in the more than three-year-long legal battle. He underscored that Ripple’s past victory and XRP’s classification as a non-security remains solid despite the SEC’s ongoing attempts to challenge the court’s ruling.
The Ripple CEO has also labeled the regulator’s court challenge as a “misguided and infuriating appeal,” especially as the SEC had revealed previously after its unsuccessful interlocutory appeal that it had no intentions of challenging XRP’s status as a non-security.
With his strong belief in the positive outcome of the new appeal, Garlinghouse has acknowledged that the company will continue to fight the regulator as long as necessary. In December 2020, the SEC sued Ripple, accusing the crypto payments company of raising $1.3 billion through unregistered securities offering by selling XRP. With the court case dragging on for over three years, Ripple may be forced to face more settlement delays with the latest appeal.
A Cross Appeal Against SEC Might Happen
While Garlinghouse expresses his strong opposition to the SEC’s appeal, Ripple’s Chief Legal Officer (CLO), Stuart Alderoty has hinted that Ripple may consider cross-appealing the SEC’s decision to change Judge Torres’ July 2023 ruling. Alderoty pointed out that the court had already dismissed the SEC’s earlier claims of reckless conduct, suggesting that the absence of fraud allegations, victims, or financial losses in the legal case made its appeal illogical and misguided.
“The SEC’s decision to appeal is disappointing, but not surprising. This just prolongs what’s already a complete embarrassment for the agency,” Alderoty stated.
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