- Ripple CEO Brad Garlinghouse anticipates a resolution in Ripple’s case against the SEC “very soon”
- The legal battle, ongoing since 2020, has had some elements decided, some advanced to trial, and others appealed by the SEC
- Garlinghouse has suggested that a settlement might be imminent
Ripple CEO Brad Garlinghouse expects a resolution in Ripple’s case against the Securities and Exchange Commission (SEC) “very soon.” The legal battle dates back to 2020, with some elements decided, some taken forward to trial, and others being appealed by the SEC. Garlinghouse told Bloomberg that a settlement is imminent, although he didn’t specify when it might be announced. XRP has bounced 60% this month, but confirmation of a settlement has the potential to send it higher.
Institutional Sales of XRP in the Spotlight
The SEC sued Ripple in December 2020, arguing that sales of its XRP tokens constituted an unregistered sale of securities. Ripple fought the case and won a famous victory last July when the judge in the case, Judge Analise Torres of the United States District Court for the Southern District of New York, ruled that “XRP, as a digital token, is not in and of itself a “contract, transaction[,] or scheme” that embodies the Howey requirements of an investment contract.”
Ripple appealed Judge Torres’ ruling, an appeal which is now making its way through the system.
Judge Torres also ruled that the sale of XRP tokens to the public through third-party exchanges could not be considered a sale of securities, which was another key result that Ripple was hoping for, but it wasn’t all good news for Ripple: institutional sales of XRP tokens were found to constitute a securities contract.
Settlement Expected
The SEC dropped its claims that Garlinghouse and Ripple’s Executive Chairman Chris Larsen in the matter but pursued the case against the company, demanding a $2 billion settlement in March. It is this settlement that Garlinghouse told Bloomberg last week was imminent:
I can’t comment on that [case] specifically. Suffice to say, that the ruling has been clear from the judge. We expect resolution very soon, but can’t predict when the judge will rule there.
Last month, Judge Phyllis Hamilton rejected a motion by Ripple to dismiss a class action lawsuit against the company, which argues that Garlinghouse sold XRP as a security to retal investors.
