Following a recent court decision in California, Ripple (XRP) executives Brad Garlinghouse, CEO, and Stuart Alderoty, Chief Legal Officer, have issued statements aimed at clarifying the ruling and dispelling misconceptions.
The California court dismissed all class-action claims against Ripple alleging violations of federal securities laws concerning the issuance of XRP, the company’s cryptocurrency. This decision echoes a similar ruling from a New York court that declared XRP not to be a security.
However, media headlines have painted a different picture, prompting Garlinghouse to address “rumors and misleading headlines.” He emphasized the positive outcome, highlighting the dismissal of class-action claims as a significant victory.
One key takeaway is that the California ruling doesn’t affect the previous New York court decision on XRP’s status as a non-security. This is a crucial point for Ripple, as it strengthens their argument against the SEC’s claim that XRP sales constitute unregistered securities offerings.
While the federal claims were dismissed, a single state law claim regarding alleged misleading statements by Garlinghouse in a 2017 interview remains. Here, the court acknowledged the possibility of XRP being considered a security under California law in specific circumstances, even if it’s not a federal security.
Garlinghouse expressed confidence in his actions and a willingness to address the allegations in court. He also questioned the legitimacy of the claim, pointing out the limited holdings of the plaintiff and the lack of evidence that the 2017 interview influenced the purchase decision. He believes this claim is an opportunistic attempt to exploit legal loopholes for a large payout.
Alderoty echoed these sentiments, emphasizing the dismissal of federal claims and the previous ruling against XRP being a security. He views the remaining state law claim as weak, suggesting the plaintiff may not be able to prove a connection between the 2017 statement and their investment decisions.
Looking ahead, Alderoty expresses optimism regarding the upcoming trial, particularly the cross-examination phase, where they believe they can further expose the weaknesses of the case.
This back-and-forth between Ripple and the legal system regarding XRP’s classification has been ongoing for years. While the recent California court decision provides some relief, the remaining state claim keeps the issue alive. The outcome of this trial will be closely watched by the cryptocurrency industry, with potential implications for the regulatory landscape surrounding digital assets.
