The legal battle between the SEC and Ripple has now been officially extended.
Ripple Labs Inc. CEO Brad Garlinghouse is one of the major critics of regulation by enforcement tactics of the United States Securities and Exchange Commission (SEC). Recently, Garlinghouse took to X to slam the regulator following the latest Notice of Appeals filed by the regulator in its legal battle against the firm.
The strain between the blockchain payments firm and the regulator dates back to December 2020. In the lawsuit against the firm, the regulator said Ripple sold XRP as securities to investors. As the case progressed, the securities sale claims became distinguished for retail and institutional investors.
In a July 2023 ruling, Judge Analisa Torres declared that the sales of XRP on secondary trading platforms do not constitute securities offering. While this marked a partial victory for Ripple Labs, the Judge said the company violated Federal laws when it sold the coin to institutional investors.
Following this, both entered a long settlement hearing, with Judge Torres fining Ripple $125 million per an earlier CNF report. While many thought the lawsuit would end here, the regulator's appeal has effectively elongated the process.
Commenting on this, Brad Garlinghouse said the regulator is not interested in faithfully applying the rule of law. He said if the SEC cared about the law, "they would accept their loss and move on."
He further slammed the regulator under Chairman Gary Gensler as a commission only interested in creating havoc. He said under the current market condition, the regulators are not concerned whether "US innovation and technology be damned."
Ripple Labs has officially filed a cross-appeal against the SEC as a firm committed to fighting the market regulator head-on. Commenting on this, the Ripple CEO said the firm finally moved to end the SEC's regulation-by-enforcement agenda.
The timeline for any potential hearing is not defined, but the community's speculation on what will happen next has grown. Pending when more clarity will come, Ripple's Chief Legal Officer (CLO) Stuart Alderoty said that with this cross-appeal, nothing will be left on the table.
"The SEC lost on all key points -- that's why they appealed. Today, Ripple filed a cross-appeal to ensure nothing's left on the table, including the argument that there can't be an 'investment contract' without there being essential rights and obligations found in a contract," the Ripple CLO said.
Beyond Ripple Labs, more crypto firms have sued the US SEC since the start of October. First, Crypto.com sued the commission, alleging it exceeded its jurisdiction when it declared all cryptocurrency investment contracts.
Bitnomial is also challenging the SEC's claims that its proposed XRP Futures product might constitute investment offering.