The CEO of blockchain payments company Ripple, Brad Garlinghouse, has discussed the financial ramifications of the company’s legal dispute with the Securities and Exchange Commission (SEC) of the United States.
At the Dubai Fintech Summit on Monday, Garlinghouse told attendees that by the time the litigation is through, his business will have incurred staggering legal costs of $200 million.
Since 2013, Ripple and two of its co-founders have raised more than $1.3 billion in illegal securities, according to the SEC’s complaint, which was filed in December 2020. The idea that Ripple’s XRP token is a security is denied. The company established a regional base in Dubai the same year it was considering leaving the US.
The United States has prioritized politics above policy, according to Garlinghouse, who said he would prevent Bitcoin entrepreneurs from opening up shop there. The Ripple CEO asserted, “If I were you, I would not start in the United States,” and he added that many publicly traded American firms would concur.
Garlinghouse proceeded by pointing out that the United States legislative accomplishments lag well behind those of the European Union and the new Markets in Crypto-Assets (MICA) law in the United Arab Emirates, both of which have established legal frameworks for virtual assets.
Cryptocurrency market watchers have criticized U.S. authorities for using a “regulation-by-enforcement” strategy, in which organizations like the SEC and the Commodity Futures Trading Commission (CFTC) preferred to file lawsuits and threaten legal action over developing new regulations for the still-emerging sector.
Since the collapse of the FTX exchange, the SEC in particular has cracked down on some of the most prominent cryptocurrency participants over suspected violations of securities laws. However, the CEO of Ripple noted that most individuals working in the cryptocurrency industry are decent actors who wish to abide by the established standards but need them to be precisely defined.
Despite the prolonged litigation in the SEC v. Ripple case, a decision is anticipated within the next three to six weeks.
Many people in the crypto industry are keenly following the XRP case as they wait to see which way the balance of power will swing.
The litigation’s conclusion will have a big influence on the emerging crypto industry. A victory for Ripple, then, is a victory for the cryptocurrency industry as a whole.
The regulators will be forced to create clearer laws for the ecosystem if District Judge Analisa Torres rules in Ripple’s favor.
But if Ripple were to suffer a setback, the SEC would then have the justification it needs to keep going after cryptocurrency players. Instead of pursuing a legal battle with the regulatory body, such businesses and people will be mandated to settle.