- Ripple’s clash with the SEC reflects growing concerns about regulatory overreach.
- Garlinghouse accuses the SEC of disregarding court rulings on XRP’s security status.
- Legal experts argue the SEC is pushing boundaries in crypto regulation battles.
Ripple’s ongoing battle with the U.S. Securities and Exchange Commission (SEC) highlights the growing tension between the crypto industry and regulators. In July 2023, U.S. District Judge Analisa Torres ruled that XRP, the digital token used by Ripple Labs, is not a security. This was a major win for Ripple and the broader crypto market.
However, the SEC continues to claim that XRP should be classified as a security. This has frustrated many in the crypto community, especially Ripple’s CEO, Brad Garlinghouse, who has been vocal against the SEC’s actions.
Garlinghouse’s discontent highlights concerns over the SEC’s role in regulating digital assets and its refusal to acknowledge court rulings, which has sparked debates about whether the regulatory body is acting above the law.
Garlinghouse’s Frustration With the SEC’s Ongoing Stance
Brad Garlinghouse recently voiced his frustration with the SEC’s ongoing refusal to respect the court ruling. The SEC’s insistence that XRP is still a security, despite the court’s ruling, has raised significant concerns about regulatory overreach. Besides, Garlinghouse criticized the agency for displaying an attitude of being “above the law,” as it continues to regulate XRP as though the July ruling never happened.
This reaction from Garlinghouse comes during a broader legal challenge by Bitnomial, a crypto derivatives exchange, against the SEC. Bitnomial is fighting the classification of XRP futures as “security futures,” arguing that the Commodity Futures Trading Commission (CFTC) should regulate XRP derivatives since XRP is not officially a security.
Ripple Allies Question SEC’s Overreach
In its legal challenge, Bitnomial accused the SEC of exceeding its authority and placing unnecessary restrictions on the market. The exchange supports Ripple’s position, highlighting that the SEC’s stance contradicts the court ruling. Bitnomial’s arguments reflect growing discontent within the crypto community about the SEC’s handling of XRP and other digital assets.
Ripple’s Chief Legal Officer, Stuart Alderoty, has also expressed concerns about the SEC’s behavior. He questioned the legitimacy of a regulatory agency that ignores court rulings, calling the SEC’s actions unconstitutional. Alderoty argued that the agency is harming its own credibility by using aggressive tactics instead of respecting legal decisions.
Read also: SEC Vs. XRP Endgame: SEC Files Under Seal to Resolve Lawsuit
Wider Criticism of the SEC’s Approach to Crypto Regulation
Beyond Ripple, several legal experts and crypto advocates have raised concerns about the SEC’s broader approach to regulating digital assets. Prominent legal figures, including pro-XRP lawyer Bill Morgan and John Deaton, have publicly questioned the SEC’s intentions, accusing the agency of overstepping its authority.
Read also: Ripple and SEC Begin Filing Motions Under Seal To Resolve Lawsuit
Significantly, Deaton referenced a recent case involving Digital Licensing, where the SEC was penalized for misconduct. This has fueled more skepticism about the SEC’s actions, with many in the crypto industry believing the agency is exceeding its authority.
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