Ripple CEO Expects the Resolution of the SEC Case by Early 2023
Speaking to an audience at the DC Fintech Week, Brad Garlinghouse stated that he expects the court case between his company and the SEC to be resolved in the first half of 2023. The Securities and Exchange Commission sued Ripple and two of its executives—Garlinghouse being of them—for what the SEC considers an unregistered securities offering worth $1.3 billion.
Brad Garlinghouse Hopes the Trial Will End Within Months
According to Garlinghouse, he hopes the lawsuit will be resolved within a few months but expects it to finally be decided in the first half of 2023. However, Ripple’s CEO also stated that he can’t make any predictions with certainty as “federal judges work at their own pace.”
Garlinghouse also explained that Ripple would be willing to make a settlement with the Commission as long as SEC concedes that XRP is not a security. The chief executive officer of the beleaguered company added that XRP effectively has no liquidity in the US as a result of the lawsuit—a testament to how detrimental the case is seeing how Ripple’s token is the sixth-largest in the world by market cap.
Ripple unsuccessfully tried to preempt the SEC’s actions by vehemently arguing that XRP is definitely not a security as far back as 2019 but ultimately failed. Over the following years, numerous other companies faced similar tribulations and in 2022 Coinbase found itself under pressure from the SEC and had to defend its entire platform.
Having come to a court trial in front of a federal judge, the Ripple case has a special place in the digital assets sector. The ruling—whichever way it goes—will have the strength of legal precedent in the US. If the court decides in Ripple’s favor, it will be harder for the SEC to argue cryptocurrencies are securities, and if the Commission wins, the ruling will lend credence to Gensler’s view that most digital assets are securities.
The Ripple case could potentially have ramifications beyond cryptocurrencies. NFTs are similarly targeted by the Commission with the most recent development coming on Tuesday, October 11th, when the SEC allegedly launched a probe into Yuga Labs and the Bored Apes Yacht Club. Garlinghouse is aware of the significance having also stated that the case is “about the whole industry,” and added that “everyone acknowledges how important this is.”
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Is the Tide Turning in Ripple’s Favor?
Recent months saw multiple major developments regarding the Ripple case. In September, the company filed a motion to dismiss the case altogether claiming XRP isn’t under the Commission’s authority. More recently, several entities expressed their support for Ripple.
In late September, a crypto lobby group submitted an amicus curiae—a friend of the court—brief in support of the embattled company. This action was followed by two more companies after the presiding judge ruled in favor of Ripple with regard to the Hinman documents.
In early October, TapJets and I-Remit filed their own amicus curiae focusing primarily on the status of XRP, and the importance of the coin for their own business models. The SEC opposed these briefs, but the court formally accepted them nonetheless on October 11th.
Do you think Ripple will prevail in its trial against the SEC? Let us know in the comments below.