Much to the dismay and frustration of Ripple supporters and the broader crypto industry, the United States Securities and Exchange Commission (SEC) filed an appeal against the July 2023 court ruling stating that programmatic sales of XRP are not considered a security. In connection with this recent appeal, the Chief Executive Officer (CEO) of Ripple Brad Garlinghouse sharply criticized the SEC for its “irrational” decision.
Ripple CEO criticizes SEC for court appeal
On October 2, 2024, the SEC shocked the cryptocurrency community with its recent appeal Decision by Judge Analis Torres of July 2023, which states that XRP program sales are not a security. Message revealed by defense lawyer James K. Filan on X (formerly Twitter) post was met with dissatisfaction by Garlinghouse and the XRP community.
Garlinghouse approached X on the same day that the regulator’s appeal was lodged express its dissatisfaction with the SEC’s decision to continue its legal investigation against the company. Ripple’s CEO criticized the SEC, stating that the agency is “irrational” and insisting that if it were indeed logical, it would not withdrew from the protracted court case long ago.
He argued that the SEC’s legal actions against Ripple are recent complaint against the court’s decision 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’ve lost at everything that counts,” Garlinghouse said.
Despite the disappointing appeal, Garlinghouse assured that Ripple, the broader cryptocurrency industry and the rule of law have already achieved success in over three years of legal battle. He emphasized that Ripple’s victory so far and XRP’s classification as an unsecured instrument remain solid despite The SEC’s continued attempts to challenge the court’s ruling.
Ripple’s CEO also called the regulator’s complaint a “misguided and infuriating appeal,” especially since the SEC had previously revealed after an unsuccessful preliminary appeal that it had no intention of challenging XRP status as unsecured.
Strongly confident in the positive outcome of the recent appeal, Garlinghouse admitted that the company would continue to fight the regulator for as long as necessary. In December 2020, the SEC sued Ripple, accusing the cryptocurrency payments company of raising $1.3 billion through an unregistered securities offering through a sale XRP. With the court case dragging on for over three years, Ripple may have to face more delays in settlements with the latest appeal.
There may be a cross-appeal against the SEC
While Garlinghouse expresses its mighty opposition to the SEC’s appeal, Ripple’s (CLO) chief legal officer Stuart Alderoty has he suggested that Ripple may consider filing a cross-appeal of the SEC’s decision to reverse Judge Torres’ July 2023 ruling. Alderoty pointed out that the court has already dismissed the SEC’s previous allegations of reckless conduct, suggesting that the lack of allegations of fraud, victims or financial loss in the lawsuit makes it that her appeal is illogical and erroneous.
“The SEC’s decision to appeal is disappointing but not surprising. This only prolongs what is already a complete embarrassment for the agency,” Alderoty said.
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