Brad Garlinghouse, CEO of Ripple (XRP), has recognised the financial impact of the company’s involvement in a dispute with the Securities and Exchange Commission (SEC).
In a recent interview, Garlinghouse said that Ripple will have spent over $100 million on legal fees by the time the dispute is concluded.
“The facts and Law are on the side…When this is all set and done, we will have spent over $100 million on legal fees fighting the SEC… This fight is not just for Ripple; it’s for the whole industry,” Garlinghouse said at Consensus 2022 in Austin, Texas, on July 15.
The SEC coerces businesses into settlement.
According to Ripple’s chief executive officer, the enormous expenses involved in a legal battle with the SEC have always favoured the securities regulator.
According to Garlinghouse, the SEC is banking on the fact that most crypto-related businesses lack the financial means to mount a legal challenge against the agency. He added that as a consequence, these corporations were continuously intimidated into agreeing to a settlement.
“The dynamics there is that the SEC bullies companies into settlement because they cannot afford to fight,” Garlinghouse stated in the interview.
An explanation of why Ripple pursued the lawsuit.
Ripple’s CEO also explained why the business chose to fight the lawsuit rather than settle, as most cryptocurrency companies would have done in this circumstance. According to Garlinghouse, the ongoing legal battle is vital for the whole cryptocurrency industry.
Ripple filed a lawsuit against the SEC to compel the agency to provide regulatory clarity for the burgeoning industry.
He explains the Securities and Exchange Commission’s plan for regulating the burgeoning industry, which has been under intense scrutiny over the last several years. Bill Hinman delivered a lecture in 2018 in which he said that Ethereum (ETH) is not a security, which Garlinghouse cited.
He said people in the industry assumed at the time that the SEC would eventually give regulatory stability to cryptocurrencies. However, no further business-specific legislation has existed since the speech was delivered four years ago.
“The SEC current Chair Gary Gensler is walking back the [Hinman] statement around ETH. He’s been asked directly if ETH is a security and he won’t answer the question,” Garlinghouse further said.
High stakes are attached to the outcome.
The present legal battle between the SEC and Ripple is widely recognised as the most outstanding dispute in the history of cryptocurrencies.
If Ripple were to win this action, the SEC would be required to implement more transparent regulations for the cryptocurrency industry.
However, suppose Ripple is unsuccessful in its legal case. In that case, the SEC will likely persevere with its assault on cryptocurrency companies, driving them to seek settlements rather than engage in court battles.
