Ripple CEO Brad Garlinghouse believes the United States Securities and Exchange Commission (SEC) will face a prolonged process before having the chance to appeal Judge’s Torres favorable ruling in the case against Ripple.
On July 13, Judge Torres ruled partially in favor of Ripple Labs in a case brought forth by the Securities and Exchange Commission in 2020, ruling that the XRP (XRP) token is not a security regarding retail sales on digital asset exchanges.
However, Torres ruled that XRP is a security when sold to institutional investors, as it met the conditions set in the Howey Test.
In an interview with Bloomberg on July 15, Garlinghouse dismissed the institutional sales decision as "the smallest piece" of the lawsuit, and believes if the SEC were to file an appeal against the retail sales ruling, it would “only further” solidify the decision that Judge Torres made.
Garlinghouse believes that it could be a while before the SEC can file an appeal.
“As a matter of law, the law of the land right now is that XRP is not a security. Until there is an opportunity for the SEC to file an appeal, which would take years, frankly we are very optimistic.”
Garlinghouse emphasized that this is the first time the SEC has lost a "crypto case." He called out the SEC for being "a bully” and going after “weak players” in the crypto industry who weren’t able to “mount a proper defense.”
He also noted that when the case against Ripple was first filed, a lot of the crypto exchanges in the U.S. had the attitude of waiting to “see what happens,” due to uncertainty.
Related: XRP ruling a ‘watershed moment,’ but we’re not out of the woods yet — Lawyers
This is because the SEC “sowed confusion" in the market, according to Garlinghouse.
“They knew there was confusion, and they actually did things that they knew would increase confusion” he stated.
We said in Dec 2020 that we were on the right side of the law, and will be on the right side of history. Thankful to everyone who helped us get to today’s decision – one that is for all crypto innovation in the US. More to come.
— Brad Garlinghouse (@bgarlinghouse) July 13, 2023
Garlinghouse explained that this “confusion” actually masquerades as “power” to the SEC, but has prevented innovation from happening in the U.S.
“The SEC has been trying to put power and politics over what is really just sound policy and providing clear rules of the road” he stated, adding that it has put made it difficult for U.S. entrepreneurs and investors to participate in the crypto market and blockchain technologies.