Ripple CEO Brad Garlinghouse says it’s “absurd” to accuse a judge of applying the law in good faith in a case SEC against the company.
“The SEC made this mess by imagining itself as a cop in the battle for cryptocurrency when it did not have the authority to do so. Where did this lead us? Consumers are stuck in bankruptcy proceedings while the regulator holds press conferences,” he said.
According to Garlinghouse, “sensible legislation, not forced regulation” is the only way to set clear rules and protect retail investors.
The SEC filed a lawsuit against Ripple in 2020, accusing the company of distributing about $1.3 billion worth of unregistered securities in the form of tokens.
On July 13, 2023, Judge Analisa Torres ruled that selling XRP directly to institutional investors violated SEC rules, but offerings to retail investors on exchanges did not.
Recently, the agency asked the judge to ignore part of the decision in the case against Ripple, because it does not comply with applicable securities laws and can be appealed. In an updated lawsuit against Terraform Labs and its CEO Do Kwon, the SEC said the verdict “creates an artificial distinction between the expectations of institutional and retail investors.”
Ripple General Counsel Stuart Alderothy also joined the criticism of the department. According to him, attempts to justify the non-involvement of XRP in the class of securities are similar to disputes with a “flat earther about a round world.”
Earlier, SEC Chairman Gary Gensler said the agency was “disappointed” with the decision on retail investors, but “satisfied” with the verdict on institutional sales.
Recall that the former lawyer of the Commission, John Reed Stark, called the court’s verdict in the case against Ripple “shaky”. He did not rule out that the department will appeal the decision, and a higher authority will cancel the previous decisions.
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