On a rainy Friday night in September, thousands of people gathered at New York’s legendary Hammerstein Ballroom concert venue.

victory celebration

It’s been home to artists from the Grateful Dead, Jane’s Addiction, and David Bowie to Taylor Swift.

But Taylor Swift wasn’t what the audience was looking for that day. They were there for far more important things. They came for “The Proper Party.”

What is the significance of this party? A few months earlier, Ripple CEO Brad Garlinghouse said that if Ripple wins its lawsuit with the SEC, he would praise the XRP community and express his gratitude by saying, He promised to have a “proper party.”

I wrote an article earlier this year introducing the XRP community, also known as the “XRP Army.” A quick summary of what I learned from the interview: For years, the XRP Army has been criticized by much of the crypto industry, and in many ways they are right. , it is worthy of respect, even if it is belated.

Related article: Why the XRP Army continues to fight (Part 1): Adults in the room
Related article: Why the XRP Army continues to fight (Part 2): “Ethergate” suspicions

Garlinghouse made this promise in May. He foresaw that he would be on the right side of law and history. And that’s right: on July 13, 2023, U.S. District Judge Analisa Torres ruled that Ripple did not violate securities laws when selling XRP to retail investors. .

The XRP army rejoiced. The price of XRP has (temporarily) doubled. While lawyers continue to debate the impact of the ruling, it was widely seen as at least a partial vindication for Ripple, XRP, Garlinghouse, and perhaps the crypto industry. More on this point later.

So Mr. Garlinghouse held “The Proper Party” as promised. On Hammerstein’s crowded dance floor, many members of the XRP Army, who had come from all over the country, wore T-shirts that read “XRP is not a security, 7.13.23,” XRP baseball caps, and even XRP socks. I was wearing it.

When Garlinghouse took the stage, the audience cheered. After expressing his gratitude, he began to tell a personal story. “It’s right before Christmas and the SEC is suing me,” Garlinghouse said into the microphone. This happened when the SEC suddenly announced on December 22, 2020 that it had filed a lawsuit against Garlinghouse and Ripple co-founder Chris Larsen. The crowd booed the SEC story. Someone yelled, “Fuck the SEC!”

“To be honest, it was a dark time,” Garlinghouse told attendees.

Lawsuit filed by SEC

Garlinghouse, a native of Topeka, Kansas, was surprised by the lawsuit directed against him personally. He felt betrayed. “I was fully cooperating. A few years before that, I had met with former SEC Chairman Jay Clayton. I didn’t bring a lawyer with me. I said there was no need for that.” We shared information about what we were doing, like, ‘This is how we use technology,”’ Garlinghouse said in a recent interview.

Although he felt that Ripple was acting in good faith, he later came to believe that “there is not always someone on the other side who is acting in good faith.”

Over the next two and a half years, Ripple was forced to spend about $150 million (approximately 22 billion yen, equivalent to 146 yen to the dollar) on its defense, Garlinghouse said.

The growth of the XRP ecosystem has slowed. And the SEC’s actions almost certainly suppressed the XRP price. XRP has been delisted from exchanges including Coinbase. Ironically, this ended up harming holders of XRP, which the SEC was nominally trying to “protect”.

For a feature on the XRP Army, I spoke to an avid XRP investor. Although he went from being a crypto millionaire to working in the hardware department at Lowe’s, he still believed the price of XRP would recover.

So why did the SEC ultimately sue Ripple and Garlinghouse? I asked Mr. Garlinghouse directly. “Why do you think you were sued? What was the motive?”

silence. A long silence.

It took so long that I was worried that the call had been disconnected.

During this long silence, I thought of a hypothesis by the XRP army. They believe that key figures at the SEC were hard on Ripple because of their ties to the Ethereum Foundation. This suspicion is called “ETHGate.” (Will Mr. Garlinghouse mention that?)

Finally, after a long pause, Garlinghouse said, “I don’t know.” He added, “I believe one day we’ll find out,” but added, “It’s just unbelievable that they filed this lawsuit against me and Chris personally.”

The return of Ripple

It’s been a tough two years for Ripple and XRP since the December 2020 lawsuit. But quietly, almost secretly, they continued to develop, innovate, and forge partnerships.

Ripple has launched a central bank digital currency (CBDC) platform and announced partnerships with Hong Kong Monetary Authority, Taiwan’s Taipei Fubon Bank, National Bank of Georgia, Dubai Financial Services Authority, and others. To outsiders, XRP seemed like a doomed project, but insiders sensed that it was poised to literally replace the world’s central banking infrastructure.

There’s still a lot of work to do before world domination, but by all accounts, 2023 is a year of triumph for Garlinghouse. That’s why he was named one of CoinDesk’s Most Influential People of 2023.

By the way, what happened to the lawsuit against him personally? The lawsuit was dismissed in October. And the SEC’s appeal of the July ruling was denied.

The entire crypto industry, which has long been skeptical of Ripple, stands to benefit from Ripple’s legal victory. If XRP is not a security (at least when sold to retail investors), it will likely set a precedent for thousands of other projects in legal limbo.

And perhaps the SEC will take a backseat to future lawsuits. “If Ripple had not won this case and the claims against me and Chris had not been dropped, the SEC would have rallied and become more aggressive against more projects. “The freight train cuts right to the heart of the chairman’s argument,” Garlinghouse said.

Garlinghouse knows that his resurgence in 2023 didn’t happen out of thin air. He had help. There was a community. There was an army.

The role of the XRP army in the battle for Ripple

Let’s get back to the Hammerstein Ballroom stage. Garlinghouse told the audience that December 2020 was a dark time for her. And he added an important closing note.

“It was a dark time. But out of nowhere, a ray of light came in. That light’s name was John Deaton.”

Once again, the audience cheered. Garlinghouse pointed to John Deaton, a tall, muscular, bearded lawyer. He embodies the heart, soul, and brain of the XRP Army in many ways.

Mr. Deaton raised his fist in solidarity. He pumped his fist even more. The audience cheered as if he were a rock star. Deaton, with the help of XRP supporters like Brad Kimes and Digital Asset Investor, rallied the XRP community and said they are buying XRP (not Ripple) and that Ripple He countered the SEC’s argument by telling the judge that he had never even heard of the name. It is unclear how much influence Judge Torres’ decision had, but it is possible that the XRP community saved Ripple.

So maybe the award for most influential person should go to the entire XRP army, not just Garlinghouse.

Garlinghouse seems to think so. “Being able to say without hesitation that XRP is not a security is just the best,” he told Hammerstein attendees. They cheered again. Some people shouted, “It’s not securities!” This is almost certainly the first time in the Hammerstein Ballroom’s 116-year history that people have shouted “Not securities!”

“Together we fought and together we won,” Garlinghouse told attendees.

Mr. Garlinghouse then ceded the stage to Lenny Kravitz. Hammerstein was a proper concert venue, and this was a “proper party.”

｜Translation and editing: Akiko Yamaguchi, Takayuki Masuda
｜Image: NFT image of Brad Garlinghouse (La Vaun)
｜Original text: Brad Garlinghouse Is 2023’s Comeback King With XRP’s Win Over SEC