According to U.Today, Ripple CEO Brad Garlinghouse has noted a curious coincidence: the timing of Ripple's opposition brief filing in its ongoing lawsuit with the Securities and Exchange Commission (SEC) coincides with the abrupt resignation of two SEC lawyers involved in a different case. The two lawyers, Michael Welsh and Joseph Watkins, resigned after being threatened with termination following a federal court's harsh criticism and sanctioning of the SEC for 'gross abuse' of power in the Debt Box case.
The Debt Box case, against Digital Licensing Inc., a cryptocurrency platform, was marred by false assertions, misrepresentations, and a lack of evidence, according to Robert Shelby, the federal district court judge overseeing the case. The SEC was sanctioned for abuse of power in March, and the SEC's chief of enforcement has since apologized for the oversight.
Garlinghouse responded to these events by stating that it felt 'apropos' that Ripple filed its response on the same day that news broke of the two SEC lawyers' resignations. He has been vocal about his criticism of the SEC's conduct, stating, 'The US will be picking up the pieces of the agency’s disastrous policies long after Gensler is gone.'
Garlinghouse has been a prominent critic of the SEC's approach to regulating the crypto industry, and the recent controversy surrounding the Debt Box case has cast a shadow over the SEC. On April 22, 2024, Ripple filed a motion to strike new expert materials the SEC submitted in support of its motion for remedies and entry of final judgment. Ripple's opposition to the SEC’s request for $2 billion in penalties for legacy institutional sales was also made public.
Ripple Chief Legal Officer Stuart Alderoty emphasized that in a case that had no allegations or findings of recklessness or fraud, and in which Ripple won on significant issues, the SEC’s request is just more evidence of its ongoing intimidation against all of crypto in the U.S., prompting Garlinghouse's comments.