By
Steve Muchoki
April 26th, 2024
Ripple CEO Brad Garlinghouse reminds how Jay Clayton has pushed the case against Ripple while exposing his hypocrisy against the recent SEC actions.
Ripple CEO Brad Garlinghouse has expressed strong criticism of former United States Securities and Exchange Commission (SEC) Chair Jay Clayton’s statements concerning the regulatory approach of the agency. In early 2023, the SEC began a series of regulatory actions targeting cryptocurrency exchanges and firms.
During a June 29, 2023 interview with CNBC, Clayton outlined his perspective that the SEC should initiate legal actions against specific companies solely when they possess substantial legal justifications. He underscored the importance of regulatory agencies introducing regulations and legal cases that they believe will withstand thorough judicial scrutiny.
Responding to the old tweet from June, shared by Cameron Winklevoss, Garlinghouse stated:
“Watching this clip makes my blood boil. The hypocrisy is shocking. @CNBC @SquawkCNBC should be calling him out for the bullshit. (As a reminder, jay clayton brought the case against ripple, me and Chris Larsen. And left the building the next day).”
Note that it was Jay Clayton who filed the lawsuit against Ripple on charges of security law violations, just a few days before leaving the office in December 2020.
Following the SEC’s decision to dismiss the allegations without prejudice, the Ripple CEO emphasized that the former SEC chair had initiated a lawsuit with minimal prospects of success in court. The lawsuit, brought against Ripple, Garlinghouse, and Ripple co-founder Christian Larsen in December 2020, alleged that the company and its two executives engaged in an “unregistered, ongoing digital asset securities offering,” raising over $1.3 billion through the sale of the XRP token.
“As a reminder, Jay Clayton brought the case against Ripple, me and Chris Larsen. And left the building the next day,” said Garlinghouse.
Recwent Lawsuit Developments for Ripple
Clayton’s remarks from June 2023 have drawn renewed interest due to the latest developments in the lawsuit concerning Garlinghouse and Larsen. As reported earlier, the SEC sought to dismiss the charges against these executives in October.
Legal experts are now evaluating the likelihood of a successful SEC appeal in the ongoing Ripple vs. SEC case concerning XRP. Jeremy Hogan, a lawyer at Hogan & Hogan, has weighed in on the SEC’s appeal prospects, citing statistics to suggest that the SEC has only a 14.2% chance of success on appeal. He contends that the fact-based nature of Judge Torres’ opinion does not work in the SEC’s favor.
Another attorney, Bill Morgan, takes a more pessimistic view of the SEC’s chances, estimating a mere 3% likelihood of success on appeal. He argues that, in his opinion, XRP sales do not even meet the criteria of the Howey test, which determines whether an asset qualifies as an investment contract security
