Ripple CEO Brad Garlinghouse believes that the United States Securities and Exchange Commission (SEC) will face a lengthy process before they have the chance to appeal the ruling in the case against Ripple Labs.
On July 13, US District Judge Analisa Torres ruled partially in favor of Ripple in a case brought by the SEC in 2020, ruling that the XRP (XRP) token is not a security when sold on retail digital asset exchanges.
However, Torres also ruled that XRP is a security when sold to institutional investors, as it meets the conditions set out in the Howey test.
In an interview with Bloomberg on July 1[ads1]5, Garlinghouse dismissed the institutional sale decision as “the smallest part” of the lawsuit. He believes that if the SEC were to appeal the ruling on retail sales, it would only further strengthen the decision that Torres made.
Although Garlinghouse believes it may be a while before the SEC has the opportunity to 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 will take years, frankly, we’re 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 players in the crypto industry who couldn’t “mount a proper defense.”
He also noted that when the case against Ripple was first filed, many of the crypto exchanges in the US had a wait-and-see attitude due to uncertainty. This resulted in several exchanges, such as Coinbase and Kraken, removing XRP entirely.
Related: XRP marks a ‘watershed moment’, but we’re not out of the woods yet – lawyers
The SEC “sowed confusion” in the market, according to Garlinghouse.
“They knew there was confusion, and they actually did things that they knew would add to the confusion,” he said.
Garlinghouse explained that this confusion actually “masqueraded as power” to the SEC, thereby preventing innovation in the United States.
“The SEC has tried to put power and politics above what is really just sound policy and to provide clear driving rules,” he said.
He pointed out that this has made it difficult for entrepreneurs and investors to participate in the US crypto market and blockchain industry.
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