In a recent interview with Bloomberg’s Annabelle Droulers at the Singapore Token2049 conference, Ripple CEO Brad Garlinghouse shared his insights on the ongoing appeal by the Securities and Exchange Commission (SEC) regarding a court decision by Judge Analisa Torres.
Garlinghouse expressed his frustration with the SEC’s persistence, stating, “Well, on one hand, it’s frustrating. You have a government with unlimited resources to keep fighting a fight that they already lost.” He highlighted the significant financial toll the case has taken on Ripple, with the company spending “well over $100 million” in legal fees.
Garlinghouse Remains Optimistic
Despite the challenges, Garlinghouse remains optimistic about the outcome. “The judge has already said very clearly that XRP is not a security. But the SEC’s request for permission to appeal is not about XRP being a security. That is still clear. It’s more nuanced, whether under certain circumstances if there is an investment contract,” he said.
Garlinghouse believes that as the case progresses through the appellate court system, the chances of a favorable outcome for Ripple increase. “Because I think as you go up the appellate court system in the United States, you actually get more conservative, and I think this bodes well. And I said it a long time ago: The facts are on our side, the law is on our side. And we will continue to fight in court,” he added.
When questioned about the future of crypto companies in the US, Garlinghouse responded, “I wouldn’t say it’s permanently shut, but it’s definitely a tough spot.” He emphasized the significance of the US in the global economy, accounting for 22% of global GDP. Garlinghouse anticipates potential shifts in the regulatory landscape with a new administration and believes that Congress will eventually be compelled to act.
He also pointed out the SEC’s recent losses in court, including a decision related to the Grayscale ETF conversion. “The judges are using really harsh language about the SEC. […] The panel is saying that the SEC has been arbitrary and capricious. These are pretty harsh words for a government agency,” Garlinghouse remarked.
Ripple CEO Brad Garlinghouse says over 80% of hiring this year will be outside US, where the crypto payments company is embroiled in a long-running legal dispute with the SEC pic.twitter.com/nZJyMMBvpY
— Bloomberg Crypto (@crypto) September 13, 2023
Ripple Pushed Out Of The US
In addition to the legal battle, the Ripple Labs CEO revealed that over 80% of its hiring this year will be outside the US. This decision is a consequence of the protracted legal dispute with the SEC. Garlinghouse praised jurisdictions like Singapore, Hong Kong, the UK, and Dubai for their proactive approach to crypto regulation, stating that these governments are “partnering with the industry and you’re seeing leadership, they’re providing clear rules and you’re seeing growth.”
The SEC, under Chair Gary Gensler, has taken a stringent stance on cryptocurrencies, especially after market disruptions in 2022, including the collapse of the FTX exchange. Gensler’s position is that most tokens are securities and should be under the SEC’s regulatory oversight. Meanwhile, Congress’s efforts to provide clarity on the status of crypto have been slow.
At press time, XRP traded at $0.4779.
Featured image from CNBC, chart from TradingView.com