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Ripple's CEO Brad Garlinghouse stated that the SEC's lawsuit against Ripple is the regulator playing "offense" and "attacking" the industry as a whole, believing it could put the U.S. at "severe risk."

The United States Securities and Exchange Commission's (SEC) regulation through “enforcement,” as opposed to “doing the work,” is not a “healthy way” to regulate an industry, and may result in the U.S. being a less attractive location for crypto firms, suggests Ripple’s CEO.

In a Mar. 3 Bloomberg interview, Brad Garlinghouse, CEO of blockchain-based digital payment network Ripple, suggested that the SEC's approach to regulation is putting the U.S. at “severe risk” of missing out on being an attractive hub for the next evolution of blockchain and crypto innovation.

Garlinghouse noted that the SEC's case against Ripple, is the SEC simply playing “offense” and “attacking” the industry as a whole, adding that if the SEC is “able to prevail,” there will be “a lot of other cases.”

He suggested that the crypto industry has “already started moving outside” of the U.S. given its crypto regulation process is "behind" other countries such as “Australia, UK, Japan, Singapore and Switzerland.”

He commended these countries for taking "the time and thoughtfulness” to create “clear rules of the road,” adding that the approach taken by the U.S. is not a “healthy way to regulate an industry.”

Garlinghouse recalled when he “first got into the tech industry in the late 90s,” there were proposals to ban the internet, due to “illicit activity,” but the government refuted the idea and decided to "create a framework.”

He emphasized “the benefits” this early adoption brought on a “geopolitical basis,” to have the "Amazon's and Google’s" based in the U.S., suggesting that the same opportunity is currently on the table with creating a framework for crypto.

Garlinghouse believes the framework process should begin with outlining “clear protections for consumers.”

He added that consumers are suffering from the “lag,” as they lack the “same protection” that regulatory frameworks "can provide."

Garlinghouse believes that a decision should come this year regarding the SEC’s case against Ripple.

More recently, John Deaton, founder of legal news outlet Crypto Law Lawyer put a call-to-action to his 245,000 twitter followers on Mar. 5 stating that all companies in “active litigation” with the SEC, should collaborate and develop “coordinated strategies,” calling it “war.”

We must think out of the and organize. For example, all companies in active litigation w/the SEC, or about to be, should be meeting, sharing ideas, and developing coordinated strategies. Its a war.

I’d be happy to help. Maybe I can replace @elonmusk as the SEC’s most hated.
— John E Deaton (@JohnEDeaton1) March 5, 2023

This comes after Kristin Smith, the Blockchain Association CEO, told Bloomberg in a Feb. 22 interview that the crypto regulation process in the U.S. is happening “behind closed doors,” adding that it is vital for more industry involvement in an “open process."

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Brad Garlinghouse

Ripple CEO Brad Garlinghouse said the firm's XRP lawsuit could come to an end within "single-digit months."

Ripple CEO Brad Garlinghouse expects the firm’s long-running dispute with the Securities Exchange Commission (SEC) will be finalized within “single-digit months” and remains confident in securing a favorable outcome.

Speaking to CNBC on Jan. 18 at the World Economic Forum in Davos, Switzerland, Garlinghouse said the verdict could come as soon as June this year now that both parties have “fully filled and fully briefed” their arguments before the U.S. District Court:

“We expect a decision from a judge certainly in 2023. You don’t really have control over when a judge makes their decisions. But I’m optimistic that sometime in the coming single digit months we’ll have closure there.”

While Garlinghouse and investors believe the facts, law and the court will ultimately side with Ripple, the Ripple CEO also took the opportunity to ridicule the SEC’s “embarrassing” behavior displayed throughout the lawsuit, noting:

“The SEC’s behavior in some of it has been embarrassing as a U.S. citizen. Just some of the things that have been happening, like you’ve got to be kidding."

Garlinghouse also argued the firm was betrayed by the regulator, as it filed the lawsuit despite their efforts to meet with them on three separate occasions seeking regulatory clarity:

“Not once did they say to me we think XRP may be a security. So to later go back and say hey the whole time we thought XRP was a security we just didn’t tell you… that doesn’t feel like a genuine partnership between public sector and private sector.”

While noting that the outcome of the case also has huge implications for the cryptocurrency industry, Garlinghouse reiterated that Ripple would only settle if it was made clear that XRP is not a security.

However, “the SEC and Gary Gensler has very outwardly said he views almost all crypto as a security” Garlinghouse said, “so that leaves very little space in the Venn diagram for settlement,” he added.

*Garlinghouse speaking with CNBC at the World Economic Forum in Davos, Switzerland. Source:* *CNBC.*

Garlinghouse added that the U.S. SEC should take note from some of the more crypto-friendly countries who are piecing together more “positive” regulation that doesn’t stifle innovation.

Among the countries he spoke highly of included the the United Arab Emirates, Japan, Singapore, Switzerland and the U.K.

The lawsuit was initiated by the SEC in December 2020, claiming that Ripple illegally sold its XRP token as an unregistered security.

Ripple has long disputed the claim, arguing that it doesn’t constitute an investment contract under the Howey test.

Should the two sides fail to settle, the New York-based District Court will either make a standalone ruling or put the matter before a jury in a trial.

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Brad Garlinghouse

U.S. congressional candidate January Walker said a potential settlement would be a loss for the "whole world" and Web3.

Rumors continue to swirl suggesting the two-year legal battle between Ripple Labs and the United States Securities and Exchange Commission (SEC) may be coming to an end as early as this week, prompting the crypto community to weigh in on the matter.

Speculation about the potential settlement appears to have come from a Dec. 10 ask-me-anything (AMA) with Cardano founder Charles Hoskinson, who said he had heard rumors that the case would be settled on Dec. 15.

In the days since, there's been plenty of commentary from the community — giving their two cents on what a settlement would mean for Ripple and the wider crypto industry.

In a Dec. 12 Twitter post, pro-crypto United States congressional candidate January Walker opined that an unfavorable settlement from Ripple would be a “loss for the whole world & WEB3,” adding:

“The world follows the actions of the USA, and how the government handles one of us, sets precedence for how they handle all of us,” she said while calling for the industry to "work together."

The world follows the actions of the USA, and how the government handles one of us, sets precedence for how they handle all of us. Instead of battling against each other claiming one group is better than another we need to work together for the right legislation.
— January Walker (@UtahPolitician) December 12, 2022

David Gokhshtein, the founder of blockchain-focused media company Gokhshtein Media, weighed in as well in a Dec. 10 post commenting: “We need Ripple to win this case and not settle," which would be a worst-case scenario.

“Worse case scenario is Ripple settles, but I don’t know if they’ll provide clarity for the entire industry,” he added.

During the Dec. 10 AMA, Hoskinson also said that a settlement could have “catastrophic implications for the industry one way or the other.”

“But you know, you just keep moving forward. Regardless of what happens, it’s a decentralized ecosystem that you guys control.”

Hoskinson later reiterated in a Twitter thread that these were only rumors and that he didn’t necessarily believe them to be true.

Meanwhile, crypto attorney Jeremy Hogan, a partner at Hogan & Hogan, says there are several possible outcomes in a Dec. 10 YouTube video, telling his 157,000 subscribers he thinks there is a roughly 50% chance Ripple wins, but a “110.6% chance of something happening shortly.”

The lawyer predicts that if Ripple wins, the most likely reason would be “it had no legal obligation to purchasers of XRP after the sale occurred, no post sale obligations, in other words there can be no investment contract without an investment contract.”

“The evidence is clear in the Ripple case that there is no ongoing legal relationship between Ripple and XRP purchasers. There’s just none, and the SEC has failed to address that problem,” he added.

However, he also backed an earlier Nov. 4 prediction by defense lawyer and former federal prosecutor James Filan that the case will be decided on or before Mar. 31, 2023, calling it a “proclamation from a legal God.”

I am sticking to my prediction that District Judge Torres will decide both the Expert Motions and the Summary Judgment motions at the same time - on or before March 31, 2023.
— James K. Filan 126k (beware of imposters) (@FilanLaw) November 4, 2022

Ripple CEO Brad Garlinghouse told panelists at the Oct. 11 DC Fintech Week conference that he expects the case against the firm to conclude during the first half of 2023 but admitted that it was hard to predict.

He has previously said Ripple would consider a settlement with the SEC on the condition XRP is not classified as a security.

Cointelegraph has reached out to Ripple for comment but did not receive an immediate response.

Brad Garlinghouse

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