Ripple CEO Brad Garlinghouse calls the SEC “renegade agency.” Ripple is exploring legal action against the SEC.
The four-year Ripple Labs-SEC lawsuit has reached a new legal phase. Brad Garlinghouse lashed out at the SEC for defying the court’s XRP ruling in a recent X post.
Ripple’s Chief Legal Officer, Stuart Alderoty, voiced constitutional concerns about the SEC’s ongoing designation of XRP as a security notwithstanding a court ruling. Alderoty wrote on X on Friday that the SEC’s moves might harm regulatory enforcement.
The SEC is a “renegade agency” according to Ripple CEO Garlinghouse, who recently criticized it. He says: “A new low for a rogue agency many felt couldn’t go deeper. The SEC ignores a court finding that XRP isn’t a security and thinks it can operate above the law. Team Ripple will monitor and consider ways to keep the SEC accountable.”
In a new action against Bitnomial, the SEC reiterated that XRP is a securities. XRP is not a security, District Judge Analisa Torres declared in July 2023.
XRP is not a security, according to U.S. District Judge Analisa Torres’ July 2023 ruling. Ripple Labs and the crypto sector gained some ground from the verdict. Despite this verdict, the SEC insists XRP is a security.
The SEC’s XRP crackdown affects more than Ripple Labs.
Bitnomial, a crypto derivatives exchange, sued the regulator in Illinois district court. The goal is to dispute the SEC’s jurisdiction over Bitnomial’s planned XRP Futures contract.
Bitnomial requested CFTC clearance to launch the product. The SEC told the exchange that the contract would violate federal securities law unless it followed its rules.
Bitnomial counters that the SEC selectively cited court filings to support its assertion that XRP is a security while ignoring major sections of Judge Torres’ order, showing that XRP is not a security.
Ripple lead lawyer Alderoty likened the situation to a hypothetical law school test scenario in which a regulatory body loses in court but threatens enforcement to achieve compliance. “This creates fundamental constitutional difficulties and further weakens the agency’s legitimacy,” he added.
Alderoty notes that the SEC’s aggressive tactics are unlawful, undermining its credibility. Meanwhile, pro-XRP lawyer Bill Morgan and legal expert John Deaton accused the SEC of overreaching and questioned its objectives.
A recent SEC sentence for misbehavior in Digital Licensing raised suspicions about the regulator’s methodology, Deaton said.
Fintech has cross-appealed a federal judge’s ruling. The company alerted the U.S. District Court for the Southern District of New York in a one-sentence filing that it will appeal Judge Analisa Torres’ August judgement. The case will go to the Second Circuit.
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