Ripple CEO Says SEC 'Sowed Confusion In The Market,' Regulator's Appeal Could Take 'Years'

Brad Garlinghouse, the CEO of the tech and blockchain firm Ripple Labs, did not mince words about the U.S. Securities and Exchange Commission (SEC) and slammed it for sowing "confusion in the market" while noting that if the regulator appeals the court's recent verdict, it might have to wait for "years."

The crypto community was ecstatic about the result of the ruling of the District Court for the Southern District of New York, which declared that the "offer and sale of XRP on digital asset exchanges did not amount to offers and sales of investment contracts" since" the record cannot establish the third Howey prong to these transactions."

But XRP is not yet out of the woods, since the financial watchdog could still appeal the court's ruling, which Garlinghouse said would only solidify Judge Analisa Torres' decision.

"As a matter of law, the law of the land right now is that XRP is not a security. Until there is an opportunity for the SEC to file an appeal, which would take years, frankly, we are very optimistic," the Ripple Labs CEO said in an interview with Bloomberg.

The SEC filed the lawsuit against Ripple Labs over securities law violations in 2020, and the court only released its verdict last week. Over the past years, the lawsuit has dented the image of Ripple Labs and triggered cryptocurrency exchanges, which at the time, had the attitude "wait and see what happens" to delist XRP, the native token of the blockchain firm, eventually causing its value to nosedive.

According to Garlinghouse, "the SEC 'sowed confusion' in the market." He noted that the financial regulator "knew there was confusion, and they actually did things that they knew would increase confusion."

For the Ripple Labs CEO, who was also accused by the SEC, the confusion that the major Wall Street regulator created actually "masqueraded as power," which eventually prevented innovation in the country.

"The SEC has been trying to put power and politics over what is really just sound policy and providing clear rules of the road," Garlinghouse said, underlining that it has made it challenging for businesses, investors and entrepreneurs to join in the cryptocurrency and blockchain industry in the U.S.

"I think this is a huge win, not just for Ripple, but the whole industry. I think it's the first time the SEC has lost a crypto case and it really puts some of the SEC's narrative and comments that they make publicly about all of these digital assets being securities, it puts that in check and in a very good way," he said in an interview with CNBC.

XRP saw a 4.55% gain and was trading up at $0.749 over the past 24 hours, with a trading volume up by 60.91% at $3,882,706,436 as of 3:50 a.m. ET on Monday, based on the latest data from CoinMarketCap.