The CEO of San Francisco-based blockchain startup Ripple, Brad Garlinghouse, is getting ready for a lawsuit the US Securities and Exchange Commission filed against the business. The complaint asserts that Ripple's XRP cryptocurrency is an unregistered security and that the business and its officials conducted approximately $1.3 billion in unauthorized securities offerings.
Garlinghouse made it clear that he intends to contest the case because he believes it to be without substance. He has blasted the SEC in a number of tweets for what he views as a lack of clarity on its strategy to regulating cryptocurrencies and for what he sees as a regulatory climate that prevents innovation and growth in the sector.
Garlinghouse noted in a recent blog post that Ripple has consistently behaved in good faith and has collaborated with authorities to comply with relevant laws and regulations. He said that Ripple has no influence over XRP's pricing or supply since it is a currency, not a security. He also emphasized the popularity of Ripple's goods and services, including as its On-Demand Liquidity (ODL) solution, which leverages XRP to speed up international transfers.
Notwithstanding Garlinghouse's resistance, the case poses a serious threat to Ripple and the larger cryptocurrency market. If the SEC is successful, it might have profound effects on other blockchain projects and cryptocurrencies, especially those that have raised money through initial coin offers (ICOs) or other channels that can be regarded as securities offerings.