Former U.S. Commodity Futures Trading Commission (CFTC) Chair Chris Giancarlo, known as “Crypto Dad” for his support of blockchain technology, discussed the high-profile U.S. Securities and Exchange Commission (SEC) lawsuit against Ripple over XRP during an interview on Fox Business this week.
The SEC has accused Ripple of violating securities laws by issuing XRP, with a federal court ruling part of the issuance qualified as a security while other parts did not. Giancarlo argued the SEC should reconsider its approach, especially in light of recent legal outcomes and a potentially changing regulatory environment.
When asked if the SEC would drop the Ripple lawsuit, Giancarlo stated:
I think they should … I would bet they would.
In July 2023, U.S. District Judge Analisa Torres ruled that the XRP token was not a security when sold to retail investors through exchanges, but classified it as a security in institutional sales. This decision led the SEC to seek a $2 billion fine against Ripple; however, the court imposed a $125 million penalty instead. In October 2024, Judge Torres denied the SEC’s motion to appeal the ruling, stating the regulator did not demonstrate substantial grounds for a difference of opinion. Despite this, the SEC proceeded to file an appeal with the Second Circuit Court of Appeals, arguing that the decision conflicted with Supreme Court precedents.
Highlighting the mixed results of the Ripple case, Giancarlo emphasized the court’s decision as a significant setback for the SEC. Giancarlo stressed:
I would recommend that it’s time for regulatory agencies to drop a lot of these cases where they’ve lost at the trial.
The former CFTC chief pointed out that a potential shift to a more crypto-friendly administration under President-elect Donald Trump could influence the SEC’s future decisions. The Ripple case has become a pivotal legal battle in the cryptocurrency world, testing the boundaries of securities laws. A pro-crypto administration, should it materialize, could reshape the SEC’s stance on cryptocurrency regulation, including XRP. Giancarlo, who authored a legal analysis arguing that XRP is not a security, has become a vocal advocate for regulatory clarity and a lighter touch in the treatment of digital assets.
