For a year now, Ripple Labs has been fighting a securities fraud case with the Securities and Exchange Commission (SEC). But the company remains confident in its ability to see things through.
In November, Brad Garlinghouse, the company's chief executive, expressed optimism that a resolution is coming soon.
The Storm is Almost Over
Speaking to CNBC, Garlinghouse explained that a slow-moving judicial process has so far stifled progress with the SEC case. However, the company is confident that it will move on from this debacle sooner rather than later.
The CEO explained that the judge has already been asking good questions, showing that he understands the case's broader implications. So, if all goes well, the case should be done by 2022.
The SEC case against Ripple is an all-encompassing one. Last December, the regulatory agency accused the blockchain firm of selling unregistered securities in the form of XRP tokens - an act it claims has been going on since 2013.
The agency also roped Garlinghouse and other Ripple executives into the case. By selling XRP tokens several times, these men allegedly breached federal securities laws.
Over the past year, Ripple Labs has had a series of back and forth exchanges with the agency, levering some pretty wild allegations against the agency. The company's stance remains the same: XRP is not a security and is therefore not bound by securities laws.
Work Done Despite the SEC's Ire
Despite the interesting lawsuit, Ripple Labs has managed to notch up some wins this year. In March, the company embarked on a massive expansion process into the Asia-Pacific region.
Speaking with Reuters at the time, Garlinghouse confirmed that the SEC case didn't affect the expansion process.
"It (the lawsuit) has hindered activity in the United States, but it has not really impacted what's going on for us in Asia Pacific," he said.
Garinghouse also pointed out that Ripple's standing with regulators in the region had been widely responsible for the lack of blowback as it looks to expand there. Clarity in those markets helped Ripple stay on the good side of the law and has proven beneficial thus far.
For now, Ripple has joined a venture with several other Japanese companies, including the country's SHI Holdings conglomerate.
The partnership, which forms SHI Ripple, is expected to lay the groundwork for a Ripple-based payment corridor that will better connect Asia with the rest of the world.
Rocking Wall Street Next
Ripple executives also appear to be making plans for the end of the SEC case. Months back, Yoshikata Kita, chief executive of the SBI Group, said in an earnings call that Ripple is looking towards a public stock listing as soon as it can settle the legal troubles.
Kitao confirmed that Garlinghouse and Ripple's executive chairman, Chris Larsen, are actively looking towards an initial public offering (IPO), which could come as early as 2022. He's been using the company to clarify how strong some of SBI's investments are. The company is the single largest outside shareholder in Ripple, and an IPO for the latter will definitely benefit SBI's bottom line.
Garlinghouse himself has been big on IPOs. In a 2020 World Economic Forum panel, the CEO reportedly pointed out that IPOs in the crypto space will be rampant in the coming year.
"In the next 12 months, you'll see IPOs in the crypto/blockchain space. We're not going to be the first, and we're not going to be the last, but I expect us to be on the leading side. It's a natural evolution for our company," he said in part.
Since Garlinghouse made this statement, Coinbase, the largest exchange in North America, has gone public. Several other exchanges - including Binance, Kraken, and the Gemini Exchange - have also flirted with public offerings. In addition, several companies in the mining space have signed deals with special purpose acquisition companies (SPACs) to go public.
Ripple Labs is easily one of the most valuable blockchain companies in the United States. A public offering from the company might not capture the imagination like Coinbase, but it will be a big one.