CEO Brad Garlinghouse said that the legal dispute with the SEC could cost Ripple $200 million.
According to Ripple Labs CEO Brad Garlinghouse, the conflict between his company and the United States Securities and Exchange Commission (SEC) will be painful. Based on the executive’s estimates, by the end of the trial, the firm would have spent $200 million.
In December 2020, the SEC sued the company for allegedly selling securities without a license. According to the regulatory agency, the XRP token, and others of its kind, belong to the group of so-called securities. Under US law, trading these types of assets requires a license issued by the agency itself.
Under this premise, the authorities sued Ripple and its main managers. The latter denies that their native token belongs to the category of securities, so the accusation lacks merit. In other words, the SEC would have no authority to sue in a case in which it has no authority, the crypto firm argues.
Ripple’s Dispute with SEC Approaches Its Third Anniversary
Regardless of whether or not Ripple is right in the dispute with the SEC, the company would end up spending around $200 million in the process. Although this legal battle involves only one of the many companies in the crypto sector, its outcome could be decisive.
During an interview with CNBC, the CEO of the crypto company lashed out at the SEC, specifically its chairman Gary Gensler. He said that the head of that agency has made statements in which he contradicts his statement about the security quality of XRP.
“With the SEC, we will spend — this is the first time I’ve shared this publicly — by the time all’s said and done, we will have spent $200 million defending ourselves against a lawsuit, which from its very beginning, people were like, well, this doesn’t make a lot of sense,” Garlinghouse expressed to the aforementioned media outlet.
The executives targeted by the regulators’ lawsuit, Garlinghouse and Ripple co-founder Chris Larsen, dismiss the entity’s arguments. They believe that the SEC should classify XRP as a cryptocurrency, and not as a security.
Other companies recently received similar allegations from the agency as well. The outcome of this SEC conflict against Ripple will be decisive for the trading of digital assets within the United States.
In Search of a Clear Regulation
Among the companies targeted by the SEC are the exchanges Kraken and Coinbase. The board of the second regularly lashes out in the media against the agency’s accusations. The head of that platform, Brian Armstrong, regrets that there is no sufficiently clear regulation in the country that serves to stop the pressure.
Garlinghouse stated that there are videos of the SEC chairman stating that 75% of digital assets were commodities. These statements, he explains, were made in his time as an MIT professor. But now, as the SEC chairman points out, “he says they’re all securities because he’s looking for power and he’s putting power before sound policy to grow an economy in the US.”
The outcome of this controversy is expected to occur sometime in 2024, according to people close to the case. Despite this, there is no official date for the next hearing. Last year, both parties had a deadline of November 30 to deliver their closing arguments. They were made public on December 2, 2022.
By Audy Castaneda
