“SEC Created This Mess”
Ripple CEO Brad Garlinghouse has denounced the US Securities and Exchange Commission over recent comments by its lawyers hinting at a possible appeal of the case against Ripple.
In a July 23 tweet, Garlinghouse criticized the regulator for its “regulation by enforcement” approach, arguing that it has only served to hurt retail investors.
“The SEC created this mess by proclaiming it was the cop on the crypto beat when it had no legal jurisdiction,” Garlinghouse wrote in a July 23 tweet. “Where has it gotten us? Consumers held the bag in bankruptcy court while the SEC holds press conferences,”[ads1]; he added.
An important theme has emerged about protecting the retail trade. The SEC created this mess by proclaiming it was the cop on the crypto beat when it had no legal jurisdiction. Where did it get us from? Consumers held the bag in bankruptcy court while the SEC held press conferences.
— Brad Garlinghouse (@bgarlinghouse) 22 July 2023
Garlinghouse’s criticism came in response to the SEC’s latest round of comments regarding Ripple, in which the regulator hinted at appealing the split decision ruling against Ripple Labs.
On July 21, the SEC used its ongoing case against Terraform Labs founder Do Kwon to air its concerns with the ruling that retail sales of XRP (XRP) on exchanges do not meet the legal definition of a security.
“Respectfully, these parts of Ripple were wrongly settled and this court should not follow them,” SEC lawyers wrote, arguing that these sales of XRP should have been considered securities.
“The SEC staff is considering the various options available for further review and intends to recommend that the SEC seek such review,” they added.
Related: Ripple is applying for a crypto license in the UK
Speaking directly to the SEC’s comments, Garlinghouse said it was “absurd” to blame a judge for simply applying the law.
“We all know that legislation – not more regulation by enforcement – is the only way forward to provide clear rules and protect retail,” he added.
Ripple Labs general counsel Stuart Alderoty chimed in with his own comments, saying that trying to explain that XRP is not a security is like “explaining to a flat earther that the world is round.”
Talking to someone who still doesn’t understand that the symbol itself is not the security is like explaining to a flat earther that the world is round.
— Stuart Alderoty (@s_alderoty) 22 July 2023
On July 17, SEC Chairman Gary Gensler also expressed his disappointment with the court’s decision on the security status of XRP, adding that the regulator will continue to evaluate this opinion.
At the time of publication, Ripple Labs’ XRP is trading hands at $0.73, up nearly 50% in the past month, according to data from TradingView.
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