Speaking with CNBC on Monday, Ripple CEO Brad Garlinghouse said that the cryptocurrency company will have spent $200 million on its lawsuit with the Securities and Exchange commission by the time it ends.
“With the SEC, we will spend — this is the first time I’ve shared this publicly — by the time all’s said and done, we will have spent $200 million defending ourselves against a lawsuit, which from its very beginning, people were like, well, this doesn’t make a lot of sense,” he said.
The SEC sued San Francisco-based Ripple in 2020 accusing the company of raising $1.3 billion through the sale of unregistered securities, or its XRP cryptocurrency tokens. Ripple claims the tokens are not securities, but utility tokens that can be used primarily as an intermediary for cross-currency bank transfers.
If Ripple loses its lawsuit against the SEC and its XRP tokens are declared unregistered securities, then the tokens will be kicked off U.S.-based cryptocurrency exchanges and it will be difficult for the company to continue to operate in the country.
In the interview, Garlinghouse also took aim at SEC Chair Gary Gensler, claiming that he made past statements that indicated that most cryptocurrencies were not securities.
“You have video footage of the chair of the SEC, as a professor at MIT, saying 75% of these digital assets are commodities,” Garlinghouse said. “And now he says they’re all securities because he’s the head of the SEC and he’s seeking power and he’s putting power ahead of sound policy to grow an economy in the United States.”
Garlinghouse also said that he would discourage aspiring cryptocurrency entrepreneurs of starting new companies in the United States because of the regulatory crackdown.
Similar sentiments have been echoed by Coinbase CEO Brian Armstrong, who is gearing up for his own showdown with the SEC. The crypto exchange was served with a Wells Notice by the SEC earlier this year indicating that the agency plans to take an enforcement action against it, likely for trading in unregistered securities.
“The SEC is a bit of an outlier here,” Armstrong told CNBC in a separate interview. “There’s kind of a lone crusade, if you will, with Gary Gensler, the chair there, and he has taken a more anti-crypto view for some reason.”
Coinbase left San Francisco in 2021 and now the company appears to be setting its sights outside the U.S. The company recently received an a digital assets license in Bermuda in order to operate an offshore exchange, however Armstrong says the company has no plans on moving its headquarters outside the United States.
