In a recent interview, Ripple CEO Brad Garlinghouse discussed the potential of settling with the US SEC on allegations that the company raised $1.3 billion through an unregistered sale of digital asset securities.
Garlinghouse stated that Ripple has always maintained they want to settle. However, for this to happen, the CEO emphasized that the regulators must settle over the fact that XRP is not a security.
He mentioned SEC Chair Gary Gensler and his colleagues as having previously shared their thoughts on digital assets. In their view, the vast majority of cryptocurrencies are essentially a security. This stance of the SEC leaves very little room for debate, according to Garlinghouse.
The court has received all relevant briefings on the matter; thus, the duration of the trial is entirely at the judges’ discretion. However, despite this delay, Ripple’s CEO is still hopeful, predicting that the litigation would be settled in 2023, possibly by the first half.
Ripple attorney presses on
In the meantime, Ripple attorney John Deaton has elaborated on why he thinks Ripple Labs will ultimately prevail in the current litigation over the status of XRP.
Deaton argues that the SEC’s insistence that XRP is a security at all times demonstrates that the Howey test cannot be applied with any degree of certainty since it lacks a clear definition. According to Deaton, approximately 3,000 amicus filings filed in court demonstrated that first-time XRP buyers were unaware Ripple Labs existed or had any control over the coin.
The SEC has been using an expert witness to argue against XRP in court since the case began in December of 2020. Deaton pointed out that the expert tried applying the Howey test’s “common enterprise” requirement to the XRP community. A common enterprise is one in which the investor’s profits are pooled with and are dependent on the performance of third parties or those selling the investment.
Deaton argued that the allegations lack merit since the expert did not interview any XRP holders, and the SEC did not use the expert’s opinion when reaching its summary judgment.
