Brad Garlinghouse, Chief Executive Officer, Ripple, USA speaking in the Finding the Right Balance for Crypto session at the World Economic Forum Annual Meeting 2023 in Davos-Klosters, Switzerland, 19 January. Congress Centre - Aspen 2. Copyright: World Economic Forum/Valeriano Di Domenico. The SEC is dropping its appeal against Ripple, pending final approval after more than four years of legal battles, but the fight isn’t over yet. While the SEC is no longer pursuing its case against the company, Ripple is still appealing the $125 million fine and the ruling that requires it to register institutional XRP sales as securities.
The ruling from Judge Analisa Torres in August 2023 (where she determined that XRP is not a security when traded on secondary markets, but institutional XRP sales to accredited investors were classified as securities) still holds. XRP jumped by nearly 11% to $2.52 following the news, according to data from CoinGecko.
After years of litigation, the SEC has finally pulled back, but Ripple is not done yet. CEO Brad Garlinghouse sat down with Bloomberg on Wednesday and explained why the company is keeping its appeal active.
“The SEC has abandoned their appeal. That means we go from being the defendant to the plaintiff,” Brad said.
Brad also addressed how much Ripple has spent on legal fees since the case started in December 2020. “We’ve spent over $150 million defending this case, not just for us, but for the entire industry,” he said. He called the SEC’s strategy under Chair Gary Gensler an attempt to bully the crypto industry through legal action. “The SEC wanted to push its power over crypto through lawsuits. That’s over now,” he added.
In his Bloomberg interview, Brad acknowledged that dropping the appeal is an option but pointed out that the fine stems from XRP sales in 2015 and 2016—transactions that did not harm any investors. “There was no investor harm, no money lost, so why are we even here?” he asked.
The SEC’s decision to drop the appeal signals a shift in its approach to crypto enforcement. Brad said that Trump’s new administration and changes in the SEC’s leadership have played a role in this. “I think if you asked Paul Atkins and David Sacks, they’d agree this case never should have been brought,” Brad said.
Brad says IPO is not a priority for Ripple right now as it focuses more on acquisitions
Brad dismissed speculation that Ripple might go public, saying an IPO is not a priority right now. “Going public is something we can consider, but we don’t need to do it,” he said. Unlike most companies that go public to raise capital, Ripple has been able to grow organically without outside funding.
Instead, Ripple is looking at acquisitions. Brad confirmed that the company is actively looking to buy blockchain infrastructure companies. “There will be consolidation this year, and we’re going to be part of it,” he said.
Financial institutions have also started to rethink their approach to crypto, as Brad pointed out major U.S. banks that wanted nothing to do with crypto before are now changing their minds.
Two key areas where banks are showing interest are crypto custody and payments. As stablecoins and real-world asset tokenization gain traction, financial institutions are exploring ways to integrate crypto services. “Banks need to safely custody crypto assets and payments infrastructure is outdated,” Brad said.
Ripple has been expanding its stablecoin business, launching RL USD last year. The company’s goal is to make it one of the top five stablecoins by the end of the year. Brad said, “The goal is by the end of the year for RLUSD to be one of the top five in the market by the end of the year. And I think the whole market’s going to grow dramatically this year.”
The stablecoin market is currently valued at $230 billion, and some analysts believe it could grow 10x over the next five years, said Brad, adding that Ripple wants to capitalize on that as much as it can.
When asked about XRP’s supply management, Brad dismissed concerns that Ripple’s ownership of 42% of the token supply gives it an unfair advantage. “We’ve been transparent about our XRP holdings for years. Nothing has changed,” he said. The company publishes an XRP Markets Report regularly, detailing how much it sells into the market.
Brad is confident XRP will be added to the national digital asset stockpile and expects to see an XRP ETF this year
Brad said he’s pretty confident that XRP will be part of the U.S. digital asset stockpile and expects an XRP ETF to launch this year. In the conversation with Bloomberg, the Ripple CEO pointed out that under Trump’s administration, crypto is finally being taken seriously.
“President Trump posted something saying there should be other tokens, that there’s going to be a Bitcoin strategic reserve and then a crypto stockpile that would include things like XRP,” Brad said. The official executive order didn’t explicitly name XRP, but he expects that to be clarified soon.
Brad explained that the government already owns XRP through law enforcement seizures. The Treasury Department, along with various agencies, holds confiscated crypto in reserves. Those funds are expected to be transferred into the official digital asset stockpile, which is being structured to hold non-Bitcoin assets alongside the Bitcoin reserve.
Brad doesn’t know how much XRP will be included, but he expects it to be a lot. “My understanding is that the stockpile would be represented by seized cryptos other than Bitcoin. That then will be in that stockpile,” he said. The Biden administration had been hostile to crypto, but under Trump, Brad says things have completely changed. “We couldn’t get a meeting with the White House. Now we’re welcomed into the White House, and that’s just a massive change,” he said.
Right now, 11 different XRP ETF filings are pending with the SEC, including applications from Bitwise, Franklin Templeton, and other asset managers. “I think those will be live in the second half of this year,” he said.
“You’re seeing inflows into XRP. And I think that’s because you had this false negative pressure from the SEC, this kind of hand holding things down, that’s now being released,” Brad said.
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