SEC’s Lawsuit against Ripple
A few years ago, the Securities & Exchange Commission of the US (SEC) questioned the very status of XRP i.e. a cryptocurrency.
SEC claimed that XRP, which is issued by Ripple, was not purely a ‘cryptocurrency’ and further claimed that instead, XRP was ‘security’.
It was SEC’s stance that since XRP is a security, Ripple was obligated to seek its registration before selling XRP in the US.
However, Ripple objected to SEC’s stance and insisted that XRP is similar to other cryptocurrencies like Bitcoin, etc. It further denied SEC’s claim that XRP is a security and hence SEC’s permission was obligatory.
A dispute then arose between SEC and Ripple and SEC filed a lawsuit against Ripple challenging the status of XRP as crypto.
Lawsuit Likely To End Soon
The lawsuit has been pending for a long and has come to a stage where its final conclusion is expected at any time.
Ripple’s CEO, Brad Garlinghouse, is however very positive about the outcome of the lawsuit.
He was recently interviewed by CNBC at the forum of World Economic Forum (WEF), where he also commented on the SEC lawsuit.
Garlinghouse told CNBC that he does not believe that there is anything left in the case. According to him, the case will not take long to be finally decided in favor of Ripple by the adjudicating court.
He suggested that the lawsuit is going to be concluded this year by the end of the first half. He however suggested that Ripple as well as he himself is quite confident about the Court’s ruling.
He claimed that the Court has been fully apprised of facts, law, and material evidence to arrive at a just and fair decision.
SEC Lawsuit Pending Since 2020
SEC moved the lawsuit in 2020 simultaneously against XRP issuing firm, Ripple, its founder, and other senior management of Ripple.
SEC raised an allegation against Ripple in the suit that it was illegally selling ‘unregistered’ securities in the US market.
The case was heard by the Court on a number of hearings and both parties submitted their final briefs in December 2022. Now both parties are awaiting a summary judgment to be passed by the adjudicating court.
Ripple’s CEO is expecting the summary judgment to be announced soon prior to April 2023.
He is further optimistic that it is unlikely that the case is decided in favor of the SEC. In fact, he believes that after the ruling it wouldn’t be Ripple who would be asked to settle things with SEC.
Garlinghouse remarked that he would be to settle issues with SEC amicably subject to the condition that SEC accepts XRP to be ‘cryptocurrency’.
Why BTC Is A ‘Commodity’ and Not ‘Security’?
He referred to statements of the SEC’s Chairman to suggest that the Chairman is bent upon disputing the very nature of various cryptocurrencies.
He said that every cryptocurrency, except for Bitcoin, is a ‘security’ in the eyes of Gary Gensler and his team.
He then argued that considering the statements of the SEC’s Chairman, the possibility of arriving at an amicable solution is very thin.
Garlinghouse even criticized SEC Chairman’s views with regard to BTC in which Gensler has repeatedly suggested Bitcoin be a commodity.
Ripple’s CEO questioned about SEC’s contradictory treatment on the pretext that XRP has been made on the basis of Bitcoin’s whitepaper.
He claimed that there is no difference between the two nor are they any different from each other in any respect.
Landmark Summary Judgment
According to Garlinghouse, the summary judgment in the lawsuit filed by SEC against Ripple is going to be a landmark judgment.
He claimed that the judgment will resolve future disputes which though have not been raised now and could be raised later.
He insisted that the judgment is going to have a significant impact on the entire crypto industry and settle the disputes once and for all.
In the end, he was asked to comment on the growth of the crypto industry and where it is heading.
Garlinghouse replied that ‘though slow yet the growth is there, particularly outside the US’.