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Ripple CEO Brad Garlinghouse expresses frustration over the SEC’s decision to continue its legal battle against the company via an appeal.
SEC Files Notice of Appeal
The SEC sent shockwaves to the crypto community yesterday after it filed a notice of appeal to the Second Circuit. Per the notice, the regulatory agency revealed its intentions to contest a federal judge’s verdict in its case against Ripple.
#XRPCommunity #SECGov v. #Ripple #XRP BREAKING: The @SECGov has filed a Notice of Appeal of Judge Torres’s Ruling. pic.twitter.com/j8bLIZQ5LT
— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) October 2, 2024
For context, Judge Analisa Torres issued her summary judgment decision in the lawsuit in July 2023. In the ruling, she declared that both Ripple’s programmatic sales and other distributions of XRP were not securities transactions.
Conversely, she found that Ripple sold XRP as a security to institutional clients. Unsatisfied with the decision, the SEC attempted to file an immediate appeal to overturn the ruling on programmatic sales and other distribution.
However, Judge Torres denied the request last year, ordering the SEC to wait until she resolves other aspects of the case, especially the remedies litigation. The judge issued the final verdict in August, which ended in a partial victory for the parties.
Following the issuance of the final verdict, the parties were required to file a notice of appeal before October 7. With just a few days left before the October 7 appeal deadline, the SEC filed a notice of appeal yesterday.
Ripple CEO Reacts
Reacting to the development, Garlinghouse expressed frustration with the SEC and its chairman, Gary Gensler, for choosing to continue the multi-year legal battle.
The Ripple CEO suggested that the SEC should have ended the Ripple case earlier, emphasizing that the lawsuit has done more harm than good.
In particular, Garlinghouse argued that the SEC has failed to protect U.S. investors and has tarnished its reputation. He emphatically stated that the securities regulator lost on everything that matters, adding that the industry and Ripple prevailed.
XRP Non-Security Status Remains Unchanged
Notably, the Ripple exec clarified that certain decisions, like XRP’s non-security status, cannot be undone irrespective of the SEC’s appeal. According to him, the court’s declaration of XRP as a non-security remains the law of the land, and the company will continue to fight as long as necessary to protect this decision.
Interestingly, Garlinghouse recounted the SEC’s unsuccessful attempt to file an interlocutory appeal last year, saying the regulator clearly stated it was not interested in “challenging XRP’s status as a non-security.”
Ripple CEO Isn’t Surprised but Pissed
In a follow-up statement, Garlinghouse noted that he is not surprised by the SEC’s decision to appeal. However, the Ripple CEO is pissed that the SEC is wasting taxpayers’ money to fund the case he characterized as a “losing battle.”
He is also upset that the SEC continues to act without facing any recourse or consequence for its actions. Nonetheless, Garlinghouse expressed confidence that Ripple would prevail in the appeal. He suggested that the victory would benefit not only Ripple but also the XRP community and the broader crypto industry.
Ripple CLO Reacts
Notably, Ripple CLO Stuart Alderoty echoed a similar sentiment, noting that the appeal decision is not surprising but disappointing. He said the appeal will only prolong the SEC’s embarrassment in court.
He highlighted that the court had already found that Ripple was not reckless in its distribution of XRP. In addition, Alderoty said the court also found that the case had no allegations of fraud nor victims who suffered losses. The Ripple CLO slammed the SEC for engaging the crypto industry in warfare rather than faithfully applying the law.
Meanwhile, the SEC has only filed its notice of appeal but has yet to file the brief. According to Attorney Jeremy Hogan, the SEC has about 70 days to file the appeal brief.