Ripple would have spent more than $100 million on legal expenses by the time the SEC litigation was resolved, says Brad Garlinghouse, the CEO of Ripple. He highlighted that when this is all set and done, the company would have spent over $100 million on legal fees fighting the Securities and Exchange Commission. Garlinghouse says the fight is not just for Ripple, but for the whole industry.
He pointed out that the astronomical costs associated with engaging in a legal fight with the agency have always worked in favor of the regulator. The SEC counts on the fact, as per Garlinghouse, that majority of crypto-related enterprises lack the financial resources necessary to file a legal challenge. As such, it intimidates companies into agreeing to a settlement.
Garlinghouse believes the SEC bullies companies into settlements because they cannot afford to fight. He pointed out that the continuing legal struggle is crucial for the cryptocurrency sector as a whole. The legal battle is not Ripple’s alone. Ripple took the decision to move the court against the SEC to coerce the agency into providing regulatory clarity for the emerging sector. It should be noted that SEC’s strategy for regulating the crypto sector has been under a great deal of scrutiny in recent years.
The Ripple CEO says people in the space believed at the time that regulatory certainty for cryptocurrencies will ultimately be provided by the SEC. But there has not been any further legislation that is more specific for the business. Garlinghouse said Gary Gensler, the SEC chair, won’t answer the question of whether ETH is a security or not. And it’s very much confusing.
If Ripple does win the case, the Securities and Exchange Commission would have to provide more transparent guidelines for the cryptocurrency business. But if Ripple happens to lose the legal battle, the SEC will likely proceed to crack its whip on cryptocurrency firms.