Skip to main content

Ripple Labs CEO Brad Garlinghouse called the Securities and Exchange Commission a “bully” on Friday, a day after obtaining what it described as a win in an ongoing legal dispute. 

Ripple pocketed the victory on Thursday after a federal judge ruled that some of its sales of XRP did not fully meet the definition of a securities offering. XRP’s value subsequently increased as much as 85% after the ruling, and exchanges began relisting the token.

“I think the SEC has been a bully, and they’ve gone after weak players who couldn’t mount a proper defense,” Garlinghouse said Friday in an interview with Bloomberg.

The SEC accused Ripple in 2020 of illegally raising $1.3 billion through the sale of XRP. A judge on Thursday seemingly decided that XRP was not a security when sold on the secondary market, but would be a security when sold to institutional investors.

“The law of the land right now is that XRP is not a security,” Garlinghouse said on Bloomberg TV.

SEC’s crypto enforcement history

In the first months of 2023, the SEC ramped up its crypto enforcement, according to an updated June report from consulting firm Cornerstone Research

As of June 6, the agency brought 24 enforcement actions, including litigation and administrative proceedings. In 2022, the agency brought 30 enforcement actions total, which was a record at the time, according to the firm.

The SEC and Ripple could still appeal the judge’s decision. An appeal from the SEC could take years, Garlinghouse told Bloomberg. 

“The court agreed with the SEC that the Howey test governs the securities analysis of crypto transactions and rejected Ripple’s made-up test as to what constitutes an investment contract, instead emphasizing that Howey and subsequent cases have held that a variety of tangible and intangible assets can serve as the subject of an investment contract,” the SEC said in a statement to The Block following the judge’s decision.