The CEO of Ripple, Brad Garlinghouse has blamed the securities and exchange commission (SEC) for the confusion around crypto asset regulation. In a tweet in response to the recent outcome of the Ripple vs SEC case, Garlinghouse said the SEC is responsible for creating the problems.
He added that the SEC claims it has jurisdictional rights to regulate crypto, but it is in fact not responsible for that.
“The SEC created this mess by proclaiming it was the cop on the crypto beat when it had no legal jurisdiction,” he said, adding: “Where’s that gotten us? Consumers left holding the bag in bankruptcy court while the SEC holds press conferences.”
The recent ruling in the Ripple vs SEC case has created many debates, one of which is that the SEC may appeal the ruling. Apparently, the SEC intends to appeal with a filing to Judge Jed Rakoff of the U.S. District Court for the Southern District of New York.
“Respectfully, those portions of Ripple were wrongly decided, and this Court should not follow them,” the SEC lawyers argued in the filing. “SEC staff is considering the various available avenues for further review and intends to recommend that the SEC seek such review,” they added.
Garlinghouse responds to filing
In response, Garlinghouse says the SEC is blaming the judge who ruled in the Ripple vs SEC case, which concludes that blind bid sale of XRP does not violate security laws, but sale to known investors is a violation.
“It’s absurd to blame a Judge for faithfully applying the law,” Garlinghouse stated.
“We all know legislation — not more regulation by enforcement — is the only way forward to provide clear rules and protect retail,” he said, adding: “Glad to see more members of Congress like Rep. Ritchie Torres and Patrick McHenry champion this.”
Up to this point, there’s no regulatory framework in place for regulating cryptocurrencies in the U.S. Coinbase has challenged the SEC concerning this in a court filing demanding that the commission come up with a regulatory framework or leave the industry alone.
SEC appeal not a concern
Although Ripple and XRP supporters have shown some concern around the possibility of an appeal by the SEC, a pro XRP lawyer John Deaton says there’s no reason to worry about the outcome of such an appeal.
The presiding judge, Judge Torres earlier 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.“
In a long tweet, Deaton said both Ripple’s programmatic sale of XRP and Larsen’s and Garlinghouse’s sale were programmatic because they had no idea who they were selling to in both cases. As such, he argues that there’s no basis for which XRP can be considered a security, which means the appeal will not amount to anything.