Ripple CEO Brad Garlinghouse Slams News Outlets Over \'Inaccurate\' Reporting of XRP Court Decision

The fiasco began following a ruling by Judge Phyllis Hamilton of the US District Court for the Northern District of California, which threw out a class action suit against the issuers of the XRP token.

Ripple Labs CEO Brad Garlinghouse has criticized several news outlets for inaccurately reporting on a recent court decision involving XRP and the US Securities and Exchange Commission (SEC).

The issue arose after Judge Phyllis Hamilton of the US District Court for the Northern District of California dismissed a class action lawsuit against the XRP token issuers. While this was considered a significant victory for Ripple Labs, the judge allowed an individual state law claim to proceed to trial based on alleged “misleading statements” made by Garlinghouse in 2017.

As the XRP community celebrated the dismissal of securities law violation, CoinDesk and other crypto news outlets reported that Hamilton's decision could suggest that XRP may still be classified as a security. This reporting caused a stir in the ecosystem, as XRP enthusiasts believe the question of the asset being a security was resolved in a 2023 decision by District Judge Analisa Torres in New York's Southern District.

CoinDesk described the ruling as a “fly in the ointment,” but the report drew strong reactions from XRP's community, with Garlinghouse leading the criticism. According to Garlinghouse on X (formerly Twitter), Garlinghouse called the report “embarrassing,” noting that Hamilton did not explicitly term XRP as a security.

He argued that only Bitcoin (BTC) and XRP have attained regulatory clarity over their status as securities, adding that this is a well-known fact. The Ripple CEO highlighted that CoinDesk's erroneous reporting had earlier prompted the news outlet to correct a misleading headline and delete a tweet.

Community members in the comments section under CoinDesk's tweet attempted to provide context to the report by citing Judge Torres' 2023 decision.

“Spreading this misinformation about the legal status of XRP almost one year after the Torres decision is just dishonest,” Bill Morgan, a pro-XRP lawyer based in the US.

Judge Torres had ruled that XRP did not qualify as a security in its sales on exchanges or distribution by Ripple to developers and other employees. However, the 2023 ruling disclosed that the only transactions deemed as investment contracts were XRP sales to institutional clients.

Despite the outrage over CoinDesk's reporting, some lawyers maintain that Torres' ruling is not definitive and disagreements between district courts could lead to the matter being taken up by a higher court.

“We’re going to have a lot of district courts reaching differing conclusions, and even when they reach the same conclusions, they might get there for different reasons,” said Jason Gottlieb, partner at Morrison Cohen. “Until all these cases bubble up into the appellate courts and ultimately the Supreme Court, we're not likely to have a lot of clarity on the law in this area.”

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