Brad Garlinghouse, CEO of Ripple (XRP), has acknowledged the economic cost of involving the company in a proceeding with the Securities and Exchange Commission (SEC).
Garlinghouse said in a recent interview that Ripple would have spent more than $ 100 million on statutory costs by the time the proceedings were settled.
“The facts and the law are on the side … if all this is set and done, we’ll spend over $ 100 million in the fight against the SEC … this fight isn’t just for Ripple, it’s for the industry as a whole.” And Garlinghouse Said At Consensus 2022 in Austin, Texas on July 15th.
“SEC drives companies into reconciliation”
According to Ripple’s CEO, the astronomical costs associated with the legal battle with the SEC have always favored securities regulators.
According to Garlinghouse, the SEC relies on the fact that the majority of crypto companies lack the financial resources needed to file legal appeals against agents. As a result, he said, these companies are constantly threatening to agree to the settlement.
“The SEC has the dynamics of pushing companies into reconciliation because they can’t afford to fight,” Garlinghouse said in an interview.
Insight into why Ripple pursued the case
Ripple’s CEO also provided some insight into why the company decided to pursue proceedings rather than going to settlement. This is what the majority of crypto companies would have done in this situation. According to Garlinghouse, ongoing legal struggles are of great importance not only to Ripple, but to the entire crypto sector.
Ripple has decided to go to court against the SEC to force the Commission to provide regulatory clarity to the emerging sector.
He discusses the Securities and Exchange Commission’s strategy to regulate emerging sectors that have been highly scrutinized in recent years. Garlinghouse referred to a lecture given by Bill Hinman in 2018, stating that Ethereum (ETH) is not security.
He emphasized that the business people at the time believed that the certainty of cryptocurrency regulation would ultimately be provided by the SEC. But since the speech was given four years ago, there are no more business-specific laws.
“Gary Gensler, the current chair of the SEC, said: [Hinman] Statement on ETH. He was directly asked if ETH was security and he wouldn’t answer the question, “Garlinghouse added.
Bet on results is high
The current legal struggle between the SEC and Ripple is largely regarded as the biggest event ever happened in the field of cryptocurrencies.
In this case, if Ripple becomes dominant, the SEC will be forced to provide more transparent guidelines for the cryptocurrency business.
However, if Ripple fails to take legal action, the SEC will probably crack down on crypto companies and force them to seek reconciliation rather than participate in a legal battle.
Featured image: Brad Garlinghouse’s remarks at Ripple’s First Quarter 2020 Virtual All Hands Meeting