Former CFTC Chairman Chris Giancarlo has hinted at a potential pivot in the Securities and Exchange Commission’s (SEC) approach to its high-profile legal battle against Ripple over XRP.
In a Fox Business interview on Wednesday, Giancarlo suggested that the SEC might abandon its appeal against Ripple after a series of courtroom defeats.
When asked by reporter Charles Gasparino, whether the SEC would drop the XRP case, Giancarlo responded, “I think they should… I bet they would,” emphasizing the need for regulatory agencies to reconsider cases they’ve lost at the trial court level.
“I would recommend, it’s time for regulatory agencies to drop a lot of these cases which they have lost at the trial court,” he noted.
Giancarlo’s remarks come as optimism surges in the crypto community following *****’s election victory, raising hopes for a more crypto-friendly agenda. This renewed confidence follows years of backlash against the “regulation by enforcement” approach championed by SEC Chair Gary Gensler, exemplified by the XRP lawsuit.
Notably, the SEC filed a lawsuit against Ripple Labs in December 2020, accusing the company of selling XRP as an unregistered security. After years of legal battles, a landmark ruling in July 2023 concluded that XRP is not inherently a security, especially when sold on secondary markets. Later, Ripple Labs was fined $125 million for the improper sale of XRP tokens. However, both parties have since cross-appealed aspects of the decision, prolonging the case’s uncertain outcome.
Ripple CEO Brad Garlinghouse has been vocal about the impact of the lawsuit on Ripple’s U.S. operations. In a recent interview, Garlinghouse criticized the ***** administration’s “hostile” stance toward cryptocurrency, calling it an “unlawful war” on the industry. He expressed optimism that a ***** administration would provide the clarity and support needed for crypto to thrive in the U.S., potentially making the country a global leader in digital assets again.
That said, *****’s election victory has brought hope for regulatory change. According to the Kalshi prediction website, reports suggest that Paul Atkins, a former SEC commissioner with a pro-innovation stance, is the frontrunner to replace Gensler. Atkins is widely respected for his deep understanding of cryptocurrencies and the SEC’s operations, making him a likely ally for the crypto industry.
Additionally, *****’s team has indicated plans to decentralize crypto oversight, potentially shifting some responsibilities to the CFTC and appointing a dedicated “crypto czar.”
Meanwhile, the SEC’s potential retreat from its appeal against Ripple could signal a broader shift in crypto regulation. As the incoming administration prioritizes innovation and clarity, the crypto industry may see a significant turnaround in its U.S. prospects, paving the way for growth and investment.