Ripple CEO Brad Garlinghouse has exuded confidence in his company’s ability to prevail in its legal battle with the Securities and Exchange Commission (SEC). Garlinghouse told guests at the Paris Blockchain Week event that their defense has been “exceedingly better” than he imagined.
He also stated that a victory in the XRP litigation will set a positive precedent for cryptos and exchanges that have been subjected to various adverse SEC regulations.
Ripple, its CEO (Garlinghouse), and the company’s executive chairperson (Chris Larsen) are accused of engaging in criminal behavior by undertaking a $1.3 billion unregistered securities offering, according to the lawsuit, which was filed 15 months ago.
The Howey Test, which was derived from a Supreme Court decision, is used by the SEC. The lawsuit attempted to define the difference between a ‘investment contract’ and a ‘investment security.’
The SEC claims that XRP currencies were sold without being registered with the agency. However, Garlinghouse and the firm defended themselves by claiming that XRP is a virtual currency, similar to Ethereum and Bitcoin, and that it is neither registered or recognized as a security. XRP should have been viewed as a virtual currency rather than an investment contract, according to their defense team.
Garlinghouse also argued in his rebuttal that if they lost the lawsuit, it would create a poor precedent for the crypto-world.
Essentially, the approach would require XRP exchanges to register as security brokers with the Securities and Exchange Commission (SEC). This would require everyone who owns XRP tokens to register and be identified by the SEC.
Ripple was victorious earlier this week on a crucial issue made throughout the hearings.
A federal judge has refused the Securities and Exchange Commission’s (SEC) plea for reconsideration of the deliberative process privilege (DPP). The court’s decision has been hailed as a major victory for Ripple in its long-running battle with the regulator.
These winning streaks have boosted the company’s confidence in its ability to succeed in the main litigation. A victory for Ripple would be excellent news for cryptos that have been stymied by unpredictability.
