In an interview with Ryan Selkis, founder of Messari Crypto, the CEO of payment company Ripple Brad Garlinghouse talked about XRP and its legal battle with a U.S. regulator. The interview took place at Mainnet 2022, an event organized by the on-chain research company.

In late 2020, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple and Garlinghouse for the alleged offering of an unregistered security. During the interview, Garlinghouse tried to talk about some of the facts that might have led to the lawsuit, while giving his take on the regulator’s approach.

Ripple CEO: The SEC Has Gone “Cuckoo For Cocoa Puffs”

According to Garlinghouse, Ripple was involved in meetings with the SEC long before they filed their lawsuit. In 2018, the company participated in “innovation groups” to engage with the regulator and expand its knowledge about XRP and cryptocurrencies.

At that time, Garlinghouse participated in the initiatives without legal representation. During these meetings, “there was never a suggestion that XRP is a security”. Garlinghouse called these meetings “constructive”.

In 2019, the company received a letter from the regulator about an “informal” investigation on XRP. This eventually led to the lawsuit and the confrontation between the payment company and the regulator.

Talking about their legal expenses to conduct their fight against the SEC, Garlinghouse said this, while arguing that many crypto projects and companies might lack the funds to defend themselves:

I do think the SEC has been a bit of a bully in the whole industry, we will spend well well well into the hundred million dollars defending ourselves against the SEC.

Is The SEC Acting With Malice?

According to the judge in charge of the case between the SEC and Ripple, the regulator acted with “hypocrisy” and “not following faithful allegiance to the law”.

Furthermore, Garlinghouse classified the current approach of the SEC, under the leadership of Gary Gensler, as “crazy”. The current SEC Chairman has stated on several occasions that “most cryptocurrencies” could be securities and fall under their oversight, with the exception of Bitcoin.

The Ripple CEO said the following on the regulator’s approach, and probably the key difference, from his position, that differentiates XRP from a security:

The idea that now everything under Gary Gensler view is a security, it’s crazy talk (…). The 1939’s Security Act, describes a security as an investment contract (…). The point we’re are making is that there is no investment contract. Ripple the company, and Brad Garlinghouse the individual, I didn’t enter in any contract with anyone that bought XRP.

At the time of writing, XRP’s price trades at $0.4 with a 9% profit in the last 24 hours and a 48% profit over the past week. The market has positively reacted to a potential positive outcome from the legal battle against the SEC and seems to be pricing in a settlement between the parties.