Brad Garlinghouse, the CEO of blockchain payments firm Ripple, has revealed the cost implications of its legal tussle with the U.S. Securities and Exchange Commission (SEC).
$200 Million In Legal Fees
According to Brad Garlinghouse, the cost of Ripple Lab’s lawsuit with the SEC will be well above the nine-figure mark.
Speaking to onlookers at the Dubai Fintech Summit on Monday, Garlinghouse said his company will have spent an eye-popping $200 million in legal fees by the time the case is concluded.
The SEC initiated the lawsuit in December 2020, alleging that Ripple and two of its co-founders misled investors by raising over $1.3 billion in unlicensed securities since 2013; Ripple refutes that its XRP cryptocurrency is a security. The company launched a regional base in Dubai in the same year as it considered leaving the U.S.
Garlinghouse stated during the Summit that he would discourage cryptocurrency entrepreneurs from setting up shop in the U.S. as the nation has put politics ahead of policy. “If I were you, I would not start in the United States,” the Ripple boss posited, adding that several American-headquartered and publicly-traded companies would agree.
Garlinghouse went on to note that the United States’ regulatory progress is lagging significantly behind the United Arab Emirates virtual asset regulatory authority and the recent Markets in Crypto-Assets (MICA) bill in the European Union.
Crypto observers have accused U.S. regulators of using a regulation-by-enforcement strategy whereby watchdogs such as the SEC and the Commodity Futures Trading Commission (CFTC) choose to serve up suits and legal threats rather than formulate new laws for the still-nascent industry.
The SEC, in particular, has clamped down on some of the most high-profile crypto players over alleged breaches of securities regulations in recent months since the implosion of the FTX exchange. Ripple CEO, however, argued that the majority of people working in the crypto sector are good actors who want to follow the set rules but need them to be clearly defined.
The SEC vs Ripple suit has dragged on over the years, but it is expected in the next three to six weeks, there will be a judgment.
Implications Of The Protracted XRP Lawsuit
The XRP lawsuit is one closely followed by many members of the cryptoverse as they wait to see on whose side the pendulum will swing.
The ruling on the lawsuit has far-reaching repercussions on the evolving crypto industry. And as such, a victory for Ripple is a victory for the entire crypto industry.
Should District Judge Analisa Torres rule in Ripple’s favour, the regulators will be compelled to provide more straightforward laws for the ecosystem.
Yet, a loss for Ripple would give the SEC the necessary ammunition to continue cracking down on crypto players. Such companies and individuals will be forced to settle rather than pursue a legal fight with the regulatory agency.