Ripple CEO Brad Garlinghouse referred to the court ruling which deemed that XRP cannot be classified as a security as a significant victory in the ongoing legal dispute, and accused the US Securities and Exchange Commission (SEC) of bullying in an interview with Bloomberg.
Following the US court’s decision on July 13 that some of the XRP sales do not fully meet the definition of a security, Ripple declared a major victory. After the ruling, the value of XRP increased by up to 90%, and major cryptocurrency exchanges such as Coinbase and Kraken relisted the altcoin.
During an interview with Bloomberg on July 14, Ripple CEO Brad Garlinghouse stated, “I think the SEC is engaging in bullying and going after weak players who cannot mount a proper defense.” Garlinghouse also said, “Currently, the laws in the country indicate that XRP is not a security.”
In 2020, the SEC accused Ripple of making $1.3 billion in illegal securities sales through XRP sales. The US court ruled that XRP cannot be classified as a security when sold on the secondary market, but sales to institutional investors can be classified as a security. This partial victory allowed Ripple to declare victory against the SEC.
Both the SEC and Ripple can appeal the court’s decision, but Garlinghouse mentioned that the appeal process could take years.
After the court ruling, the SEC stated, “The court acknowledged that the Howey test governs the securities analysis of cryptocurrency transactions, as recognized by the SEC, and rejected Ripple’s fabricated test for determining what qualifies as a security, instead relying on the Howey test and determining that it can be applied to the classification of various tangible and intangible assets as securities in subsequent cases.”
According to the updated June report by consultancy firm Cornerstone Research, the SEC has increased its pressure on the cryptocurrency market in the first months of the year. As of June 6, the US regulatory agency has taken 24 enforcement actions, including lawsuits and administrative proceedings, against the cryptocurrency market.
According to the firm, the SEC filed a total of 30 enforcement cases against the cryptocurrency market in 2022, which was a record at the time.