Introduction
Brad Garlinghouse, the CEO of Ripple, has criticized the US Securities and Exchange Commission (SEC) for hinting at an appeal of the recent court ruling that XRP is not a security. The SEC had filed a lawsuit against Ripple in December 2020, claiming that the company had engaged in the illegal sale of securities.
In late March 2021, the US District Court for the Southern District of New York delivered a favorable ruling for Ripple, stating that XRP did not qualify as a security under US federal law. However, the SEC has indicated that it may appeal the decision, a move that Garlinghouse has described as “regrettable” and “picking winners and losers in the crypto economy.”
The SEC’s Case Against Ripple
The SEC’s case against Ripple centered around the argument that XRP was a security, rather than a currency. The SEC alleged that Ripple had engaged in an unregistered securities offering, selling XRP to investors with the promise of future profits from the company’s efforts to increase the value of the digital asset.
Ripple has always maintained that XRP is a currency, not a security, and that the company has never conducted an initial coin offering (ICO) or sold tokens as an investment opportunity. In its defense, Ripple argued that XRP was no different from other digital assets, such as bitcoin and ether, which the SEC has already deemed to be currencies.
Ripple’s Response to the SEC’s Appeal
In response to the SEC’s hints at an appeal, Garlinghouse took to Twitter to express his disappointment with the agency’s actions. He stated that the SEC was picking winners and losers in the crypto economy and that the agency’s actions were hindering innovation in the industry.
Garlinghouse also criticized the SEC’s lack of clarity on the regulatory status of digital assets, stating that the agency’s stance was causing confusion and uncertainty for market participants. He called on the agency to provide clear guidelines on what constitutes a security and what does not, in order to promote a level playing field for all participants in the industry.
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Conclusion
The SEC’s hints at an appeal of the court ruling that XRP is not a security has drawn criticism from Ripple CEO Brad Garlinghouse. Garlinghouse has described the move as “regrettable” and accused the agency of hindering innovation in the crypto industry. He has called on the SEC to provide clear guidelines on the regulatory status of digital assets, in order to promote a level playing field for all market participants.
