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 Trump’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 Biden administration’s “hostile” stance toward cryptocurrency, calling it an “unlawful war” on the industry. He expressed optimism that a Trump 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, Trump’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, Trump’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.