Ripple’s ongoing legal battle with the SEC has garnered significant attention, as accusations of unethical tactics emerge against the regulatory body. Since the lawsuit began in December 2020, the SEC has been criticized for its aggressive approach towards Ripple and its executives, particularly CEO Brad Garlinghouse and co-founder Chris Larsen. They are accused of illegally raising over $1.3 billion through an unregistered securities offering by selling XRP.
This conflict has seen both parties trading blows over the years. Legal expert John Deaton, who represents thousands of XRP investors, claims the SEC “played dirty” and crossed “ethical limits” throughout the proceedings. He revealed that the Commission’s lawyers resorted to “abusive discovery tactics,” which included threatening and harassing Ripple’s international customers, investors, and partners.
In a shocking allegation, Deaton shared that despite having extensive records of every XRP transaction linked to Garlinghouse, the SEC made an attempt to subpoena personal financial records of him and his family—including credit card statements. This tactic, according to Deaton, was a bullying maneuver aimed at coercing Ripple and its CEO.
Nevertheless, Garlinghouse showed resilience in the face of such pressures, fighting back “every step of the way,” ultimately achieving positive outcomes. Deaton expressed his optimism, stating, “I love America because two years and one Presidential election later, the future couldn’t look more bright for an industry, company, and CEO.” His sentiment was echoed when he shared a photo featuring Garlinghouse with newly elected President Donald Trump and Ripple’s CTO Stuart Alderoty, which the XRP community interpreted as a hopeful sign for Ripple’s future and the performance of its native cryptocurrency.
Recently, Garlinghouse applauded the resurgence of the cryptocurrency market, attributing it in part to Trump’s victory in the presidential elections. He noted an uptick in business activities, revealing that Ripple secured more deals in the United States within a short time frame and highlighted a shift in the company’s hiring, with 75% of new positions based in the country.
Despite some gains in court, a definitive resolution to the lawsuit remains elusive. Judge Analisa Torres ordered Ripple to pay a $125 million civil penalty for its institutional sales of XRP, marking a setback. However, she also distinguished that Ripple’s programmatic sales to retail clients via exchanges did not contravene regulations. Ripple accepted this decision, preparing to pay the fine, which was a mere fraction of the initial $2 billion sought by the SEC.
In an unexpected twist, the SEC filed an appeal in October, further elongating the legal saga. Changing tides in leadership within the SEC, specifically the potential replacement of Chair Gary Gensler with Paul Atkins, a pro-crypto advocate, may shift the balance in favor of Ripple. However, the XRP community should keep their expectations in check, recognizing the intricate nature of the legal process ahead.
