While the crypto community seems to be basking in the euphoria of Judge Torres’ summary ruling, an aspect of the final judgment remains controversial, grabbing the attention of crypto enthusiasts and journalists.
The Contentious Aspect of Judge Torres’s Summary Judgment?
It’s no longer news that Ripple’s XRP programmatic sales, which occur at the beginning of every month, are according to the ruling, not investment contracts. But Ripple’s past direct sales of XRP to institutional investors totaling $729 million are classified as securities. This is the only aspect left to be settled between the two parties.
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With the above ruling in mind, crypto investors think that Ripple could forfeit $729 million in the form of a fine to the U.S. SEC. Intriguingly, this aspect also grabbed the attention of the renowned Fox Business journalist Charles Gasparino.
Gasparino weighed into the controversial topic via a tweet where he probed if Ripple CEO, Brad Garlinghouse, could shoulder the penalty responsibility. He also asked if Ripple is financially buoyant enough to offset the fine.
BREAKING: Will @bgarlinghouse have to reach into his own pocket to pay @SECGov ruling the initial institutional sales of #XRP a security? Does @Ripple have enough money on its balance sheet to settle a possible @SECGov fine? We are waiting for answers from @Ripple stay tuned
— Charles Gasparino (@CGasparino) July 14, 2023
Brad Garlinghouse Reacts
In response to Gasoarino’s tweet, Garlinghouse claimed that the court and not the SEC would be the one to decide the issue of the potential penalties raised in the final verdict.
Garlinghouse noted that the SEC had already lost every vital aspect of the lawsuit, and its attempt to misconstrue Judge Torres’s ruling as a split victory seems quite pathetic.
Charlie, happy to come into the studio any time to discuss the facts. Any attempt by the SEC to paint this as some sort of split victory is pathetic. They lost on everything that matters (as many lawyers have noted, not just Ripple’s).
— Brad Garlinghouse (@bgarlinghouse) July 15, 2023
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“You very well know this case was never about fines or penalties; it was about establishing the non-security status of XRP. We won. They lost,” the Ripple CEO stressed.
Meanwhile, in a different finding, Paul Grewal, the chief legal officer at Coinbase, seems to corroborate Brad’s claims; he tweeted, “Don’t be misled that Judge Torres ruled that sometimes XRP is a security and sometimes it isn’t. That’s exactly the opposite of what she ruled: XRP itself is NEVER security. “ Page 15: “XRP, as a digital token, is not in and of itself a ‘contract, transaction[,] or scheme’ that embodies the Howey requirements of an investment contract.”
The SEC Seems Satisfied With The Court’s Final Ruling
Per a statement sent to Fox Business, the SEC noted that it is glad the court did not fully acquit XRP of all charges, especially the court ruling which implicated Ripple for violating federal securities law in certain circumstances through its sales of XRP.
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