Ripple CEO Brad Garlinghouse has pointed out what seems to be an intriguing coincidence: the timing of Ripple’s opposition brief filing in its ongoing lawsuit with the SEC aligns with the sudden resignation of two SEC lawyers involved in a separate case.
Two Securities and Exchange Commission lawyers resigned after a federal court sanctioned and harshly criticized the regulatory agency for “gross abuse” of power in the Debt Box case.
Michael Welsh and Joseph Watkins resigned this month after an SEC official told them they would be fired if they stayed, according to Bloomberg, citing sources familiar with the matter. The two were the principal attorneys in a case against Digital Licensing Inc., a cryptocurrency platform known as DEBT Box.
Feels apropos that we file our response on the same day that 2 SEC lawyers “resign” for their (mis)conduct in the Debt Box case…
The US will be picking up the pieces of the agency’s disastrous policies long after Gensler is gone. https://t.co/vQMHKG5kbW
— Brad Garlinghouse (@bgarlinghouse) April 23, 2024
The SEC’s complaint against DEBT Box was tainted by false assertions and misrepresentations, as well as a lack of evidence, according to Robert Shelby, the federal district court judge who oversees the case. Shelby took the unusual step of sanctioning the agency for abuse of power in March, and the SEC’s chief of enforcement has apologized for the oversight.
In light of the recent events, Garlinghouse reacted by saying that it felt “apropos” that Ripple filed its response on the same day reports emerged that two SEC lawyers resigned for their conduct in the Debt Box case.
Garlinghouse has not been shy about expressing his views on the SEC’s conduct. “The US will be picking up the pieces of the agency’s disastrous policies long after Gensler is gone,” he further remarked.
The Ripple CEO has been a prominent critic of the SEC’s approach to regulating the crypto industry, with the recent controversy surrounding the Debt Box case casting 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 highlighted 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 ask is just more evidence of its ongoing intimidation against all of crypto in the U.S., prompting the Ripple CEO’s comments.
