How Much Ripple Spend Fighting The SEC
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In an interview with Messari Crypto founder Ryan Selkis, payment company Ripple CEO Brad Garlinghouse talked about XRP and its legal battle with the US regulator. The interview took place at the Mainnet 2022 event organized by the on-chain research company.
In late 2020, the US Securities and Exchange Commission (SEC) filed suit against Ripple and Garlinghouse for allegedly offering an unregistered security. During the interview, Garlinghouse tried to talk about some of the facts that could lead to a lawsuit, while also giving his views on the regulator’s approach.
Ripple CEO: SEC Has Gone ‘Cuckoo For Cocoa Puffs’
According to Garlinghouse, Ripple was involved in meetings with the SEC long before they filed their lawsuit. In 2018, the company participated in “innovation groups” to engage with the regulator and expand its knowledge of XRP and cryptocurrencies.
At the time, Garlinghouse participated in initiatives without a legal representative. During these meetings, “there was never any reference to XRP being a security.” Garlinghouse called these meetings “constructive.”
In 2019, the company received a letter from the regulator regarding an “unofficial” XRP investigation. This eventually led to a lawsuit and a clash between the payment company and the regulator.
Speaking about his legal expenses in the fight against the SEC, Garlinghouse had this to say, while also arguing that many crypto projects and companies may lack the funds to defend themselves:
I think the SEC has been a bit of a bully across the industry, we spend well over a hundred million dollars to defend ourselves against the SEC.
Is the SEC acting maliciously?
According to the judge in charge of the case between the SEC and Ripple, the regulator acted with “hypocrisy” and “failed to faithfully follow the law.”
Additionally, Garlinghouse characterized the SEC’s current approach under Gary Gensler as “insane.” The current chairman of the SEC has stated on several occasions that “most cryptocurrencies” can be securities and fall under their supervision, with the exception of Bitcoin.
Ripple’s CEO had this to say about the regulator’s approach and arguably the key difference in his position that separates XRP from a security:
The idea that everything is safe now according to Gary Gensler’s view is crazy talk (…). In the Securities Act of 1939, a security is described as an investment contract (…). We mean that there is no investment agreement. Ripple the company and Brad Garlinghouse the person, I did not contract with anyone who bought XRP.
At the time of writing, the XRP price is trading at $0.4 with a 9 percent gain over the past 24 hours and a 48 percent gain over the past week. Markets have reacted positively to the potential positive outcome of the legal battle against the SEC and appear to be pricing in a settlement between the parties.