Crypto Counsel: How Ripple’s top lawyer navigates uncharted waters

Welcome to this week's episode of What's at Stake. I'm your host, Ylan Mui, a Managing Director here at Penta.

And I'm Brian DeAngelis, a Partner and Head of the DC Office here at Penta.

Today we're joined by a special guest, Deborah McCrimmon, Ripple's Vice President and Deputy General Counsel. Ripple is the leading provider of digital asset infrastructure for financial institutions, delivering simple, compliant, reliable software that unlocks efficiencies, reduces friction, and enhances innovation in global finance. With a proven track record working with regulators and policymakers around the world, Ripple's payments, custody, and stablecoin solutions are pioneering the digital asset economy, building credibility and trust in enterprise blockchain. That's why we're so excited to have Deborah with us today. She helps lead Ripple's legal strategy. Deborah, welcome to the podcast.

Thank you for having me. I'm happy to be here.

Deborah, you're actually the third person we've had on from Ripple.

They're longtime guests here on the podcast. Friends of the pod. Yes.

And one of the things we like to do is get to know the different folks who are joining the podcast and kind of what led them to where they are today. So, jumping right into it, why don't you tell us a little bit about yourself and what you're focused on at Ripple?

Sure, well, thank you again for having me. I'm vice president and deputy general counsel at Ripple, where I lead teams supporting litigation, employment and then legal advice for one of our business units. I've been practicing law for more than 20 years now, which is kind of crazy to say and I joined Ripple in early 2018 as a sole litigator at the time. I think we were a legal team of five lawyers when I joined and I think it was around employee 210-ish more or less. Since that time, we've grown a lot. The company's changed a lot, the industry's changed a lot and our legal team has grown as well. Today, I spend most of my time managing high-stakes litigation, including our engagement with the SEC and beyond the courtroom and my matters. I'm also deeply invested in mentoring, especially our amazing team of women lawyers around the world.

Yeah, I love it. I love to see more women in finance. That's fantastic, and we'll get more into that in just a little bit. But for those in our audience who may not be as familiar with crypto, or with Ripple in particular, tell us what the company does and what problem you all are trying to solve.

Sure. So at Ripple, we're building what we call the internet of value, and what we're focused on is trying to make money move as seamlessly as information moves today. So you can send an email across the world, you have it in a second. It's not so easy right now. Sending money across borders is slow, it's really expensive, it's opaque and it's crazy. We can stream a video from the space station, but we can't send money in real time globally. Believe it or not, it's actually still faster to get on an airplane with cash and fly overseas than it is to send money using traditional banking rails.

Okay, that's crazy, that's a crazy stat.

I feel like we've been talking about this for 20 years.

Yeah, my young son overheard this at a meeting. Our CEO was actually giving a company meeting and he overheard Brad saying this exact same thing it's faster to get on a plane and travel with money than it is to use traditional rails, and my young child I think he was eight at the time he goes.

That is some crazy stuff, so even at eight years old, he figured that one out. Deep insights.

Yes, exactly so. Ripple is a leading provider of digital asset infrastructure for financial institutions. Our payments, custody and stablecoin solutions are built on simplicity, they're built on compliance and they're built on reliability. Together with customers, partners and the developer community, we are transforming the way the world tokenizes, stores, exchanges and moves value. As you mentioned earlier, Ripple has a proven track record of working with regulators and policymakers around the world to support the transformation of traditional finance, and I'm lucky to be a part of that. Our solutions leverage the XRP ledger and its native digital asset, XRP, which was purpose-built to enable fast, low-cost, highly scalable transactions across developer and financial use cases. Ultimately, our goal is to really transform the way the world tokenizes, stores, exchanges and moves value.

So I want to ask what motivated you to become a lawyer? But maybe also, did you ever envision you'd end up at one of the leading crypto companies kind of leading up their legal teams?

The answer to that is easily no. In fact, when I was making the decision about whether or not to become a lawyer, blockchain and crypto was not a thing, so maybe stepping back, I had always known I wanted to go into a profession where I could do something that gave back. When I was in college, I was thinking about getting my master's in social work or a law degree, and I decided that a law degree provided me a few more options. I felt like I could do, you know, go in a bunch of different directions if I got a law degree versus a master's in social work. So I ultimately decided to go to law school and when I first became a lawyer, like I said, I wasn't thinking about crypto or blockchain, but I started thinking about making a jump from private practice, where I was for about 14 years, to an in-house position, because I really was looking for an opportunity to sort of dive deeper with my clients.

Sure.

I worked at a leading law firm in San Francisco. A lot of our clients were technology companies early stage tech companies and I, as a litigator, was really helping them with a very discrete issue most of the time, and so I got to know that issue very, very well, whether it be a breach of contract or an issue with some technology. But I didn't get an opportunity to know their bigger picture, their bigger strategies, their goals, and I felt like I wanted to do that. I felt like something was missing.

Yeah, it keeps you curious, yeah.

Yeah, and so I remember having a client who I'd gotten very close with as we went through a very contentious piece of litigation and at the very end of the case, he said to me, "Deborah, I love you, but I hope I never see you again." Not personal right?

Like he was this serial entrepreneur. I think he's gone on to found a number of additional companies and this litigation was just noise for him. It was such a distraction. They were so small that they didn't have an in-house legal team. So I'm spending time with the CEO and the COO trying to put together their defense and it was a really unfortunate for him, despite the positive relationship we had. So at that point I decided, hey, I want to jump in-house.

And I want to come back to something you mentioned at the very beginning of the conversation, which is the mentorship that you've done along the way and the work that you've done to help, maybe, other women in the industry to balance I hate using that word, because we all know there's no balance but to juggle really what is a very demanding career as well as a very demanding home life. I know I'm a mom of three, you're a mom of three, I think Brian's a dad of three, so we all know that it can be a struggle, and so I would love to hear how you have approached that through your time.

Yeah, I mean I wish I had a silver answer like how to give advice to people. I think I've been very fortunate. I think there are a lot of reasons and people I can point to who have made and helped me make this career possible. Juggling three kids it's a lot, but it's also really awesome. And even though all three of my kids have said we hope never to be lawyers ever, and even though all three of my kids have said we hope never to be lawyers.

Ever they'll change their minds like that you did.

But yeah, I mean I think you know, taking it day by day. I think being really organized is helpful. Having people in your corner who believe in you, I think is really important. I also think recognizing and being OK with things are never going to go the way you planned. So you've got it, you've got your schedule, you've got everything lined up. Somebody's going to get sick, somebody has a work, travel or something comes up, and so you need to be flexible, you need to sort of roll with the punches and through most things in life.

I think having a little bit of humor helps as well. That's great advice. Yeah, tell me a little bit. So you decide to leave your law firm, you go into Ripple. That was still pretty early. In some ways it seems exactly the same.

So, as you mentioned, we were much smaller then. There were 200 employees. When I joined, we only took up two floors in the building we were in and everybody knew everybody. It was incredibly collaborative. Things were moving very, very fast. We were the ideas that people had. This is early 2018 for the blockchain space. I mean it was just incredible how creative people were. That's maybe not my strength, so I was just just felt such an opportunity to work with people who had all these amazingly innovative ideas. They still have those ideas, or more different ideas, but still ideas, and that part of the job in Ripple remained the same really big thinking, really trying to achieve this internet of value to your point. We've grown a lot. We're now about 900 employees. There's much more. We've moved from two floors in a single building to an entire building in San Francisco yeah, it's a beautiful space.

A much more mature organization is still very dedicated to its original mission.

I'm curious about all those big ideas. Are you more the lawyer that's telling them when to stop, or more the lawyer? How are we going to figure out how to make this big idea happen, because it's a pretty creative space, yeah.

Well, that's what's really exciting about this space and, as a lawyer, thinking through some really challenging, difficult questions for which there are not great rules of the road. So how do you advise your client in a way that is in line with the laws as best you understand them to be? I think that's what I love best about this job.

And then public advocacy around the issue. Given just the scale of this case, its implications for token classification, we'll get into the broader regulatory climate everything. Can you just briefly walk us through the history of the SEC's lawsuit and maybe your initial reactions when that first came across your desk?

Sure happy to. So the SEC sued Ripple, Ripple's CEO and its former CEO and executive chairman three days before Christmas 2020. And what the SEC was alleging was essentially that all of Ripple's distribution of the digital asset XRP from 2013 until December 22nd 2020 were securities. So it's this extremely broad, extremely voluminous set of allegations. The allegations hinged on this question of whether or not the digital asset XRP is a security under the securities laws and, therefore, if Ripple's sales or distribution of XRP were securities transactions. This was a registration case. The SEC's allegations were Ripple failed to register its sales of securities. This was not a fraud case. This was not a market manipulation case. This was a very technical registration case. But it was very important, a very important question for Ripple, obviously, and for the industry.

Yeah, many others shortly after Ripple, exactly.

In our view, and I continue to believe this today, the SEC's legal theory stretched the definition of security far, far beyond what it was ever intended to be, and that the SEC's legal theory stretched the definition of security far, far beyond what it was ever intended to be, and that the SEC was acting far outside their mandate from Congress. Our stance, which was later affirmed by the court several years later after very hard-fought litigation, was simple, actually, but really important it was that XRP is not a security. There were lots of ups and downs before we were sued, so you asked me what were my initial reactions?

Yeah, a lot of ups and downs before we were sued. It was pretty surreal. The timing was terrible, but we knew right away we were in it to fight it. This was not just for Ripple, but it was for the industry and we were ready.

Yeah, it was sort of a defining moment where there wasn't much. You know Congress, the SEC they weren't very educated on you know this technology, this industry, and so this lawsuit was filed.

That was a surprise, a very pleasant surprise, but it was definitely something I had not anticipated or was on my radar at all.

You were heads down in this lawsuit for years, just working in the weeds every day, you know, sort of fighting back against this allegation from the SEC. What was that like for you to be so singularly focused on this case?

Yeah.

Are you still?

Recovering -2021 was intense for non-lawyers. This lawsuit felt like it went on forever, and it did. It went on for many, many years. The most labor-intensive part of a lawsuit is what we call the discovery period, and so that's when you're exchanging documents, but in our case, because we were suing the government, the documents largely went one way. It was very voluminous requests on Ripple, although we were very successful in getting some documents from the SEC. You know there are depositions, there are subpoenas. It is an extraordinary amount of work and we wanted to move fast.

We wanted this regulatory clarity. We wanted to get this case over with. We wanted resolution quickly, and so we pushed for a very short discovery period. We said six months. We can do this in six months and we were ready to do that. And then the SEC went in and asked for more time. So they asked for a couple more months. I have had cases in my prior life that have discovery periods that last years. But we had this case. We were focused on trying to get it done quickly, so we pushed things very, very fast.

I think one of the most interesting things about this case and you mentioned a little bit Bryan, was around the public interest. When a case starts, you have what's called a case management conference and it's really kind of a boring thing. It's all about just setting up the schedule. You submit something to the court in advance that the parties have worked on to basically say how long is discovery, when are we going to file these kinds of motions, when is trial going to be? How many days do you need? Pretty boring. So we call into our case management conference because this is during COVID and so all of our hearings are by phone. The phone line at that first case management conference accommodated 500 people. The line maxed out.

Wow.

And somebody on my team, on our internal team, a lawyer, a litigator, was like Deborah, I can't get on the call, it's blocked. And I thought, oh my gosh, this is crazy. The CMC starts and the judge starts off by saying we have a group of law students on the line from a law school that I can't recall the name of in Florida, who are taking a securities law and blockchain course. So, counsel, would you like to start off this CMC, which means case management conference, by giving a little background on the case? That is so unusual. It is so unusual. But we were like, yes, we would love to and we seized that moment. But again, 500 law students calling in is very strange. Our next hearing is on. It's a dispute over subpoenas. It's like the most boring thing ever. And the court had now gotten savvy to, hey, this case is getting a lot of attention. So they opened up a call in line for 5,000 people.

Maxed that one out too.

The line maxed out.

Oh, my goodness.

I mean, when I was in private practice, my own clients didn't show up to discuss it and they were paying you right? And every person didn't show up to discovery for and they were paying you right? It was a very hard fought case. So we had a lot of hearings, um, on discovery emotions and which is again fighting over documents and depositions and the like, and those lines max out every single time, which is just really incredible is this the point where you're thinking like, ooh, this is history.

We're like really defining something here?

Yeah, I also think it was this point in time where I realized this case is touching a lot of people.

Yeah.

In ways that certainly I don't think the SEC anticipated. I certainly didn't anticipate, but I think that's maybe some of the beauty of blockchain that people and the XRP ledger people can be doing things with it without Ripple knowing, without me knowing. It is just building really neat, interesting, innovative things on the ledger that were then negatively impacted by the SEC's decision to have to riffle. I think that bothered a lot of people.

I think it did. And yeah, I'm curious you mentioned a few, but I'm sure there were other tough periods during this case because you had just the industry and the attention around it fluctuating at different points and public opinion turning at different points, but it's been quite a few years for the industry.

It has. It has, I think, a really positive moment where I felt I personally felt the tide turn was as we were several months into the lawsuit. We were having a hearing over getting documents from the government, which rarely happens and we fought very hard to get some of their documents. And oftentimes when you have a hearing, the court will listen, the court will read the briefs, listen to the argument, and oftentimes the judge will say, all right, I'll take it under submission, I'll think about it, I'll issue an order later. So we're at this hearing about getting documents from the SEC and they were fighting hard too to say absolutely no. And it was the only hearing, I believe, where the court ruled that day and she said, yes, Ripple gets documents and army. How important were they, do you think, in helping turn that tide and advocating for Ripple think they were very helpful for a couple of reasons, I think.

Number one it's a very long story, but there was a lawyer who intervened into our case actually which is very unusual purporting to represent thousands of XRP holders, and so I think it gave the court visibility that, hey, this lawsuit that the SEC brought about, brought against Ripple, is not just about Ripple, it impacts a lot of people. So that's point one. Point two is one of our defenses that we had was a fair notice defense that we, ripple, did not have fair notice of the law and the claims that the SEC could bring Because, as we said, like the SEC's interpretation of what was a security was so far afield from what the law had previously said in our view, and so, to support that, we were looking for speeches, talks, things the SEC or the government had said related to blockchain, crypto, xrp, ripple and the XRP army mined that for us.

We didn't ask them to. But once they saw this defense in our answer, people started finding this. I could have paid lawyers thousands of dollars, literally thousands of dollars, to do that, and yet they were finding it and posting it on Twitter, and that was tremendously helpful for me as well.

So let's fast forward a little bit. We're now in summer 2023. Judge Torres rules that XRP in and of itself is not a security. Can you fill us in a little bit on the meaning and implications of her decision there, and maybe what the last couple years have been? What's been going on since then?

Sure, yeah. So in July 2023, Judge Torres ruled on the party's motions for summary judgment and, as you said, one of her holdings, one of her key holdings, was that XRP in and of itself is not a security. That was huge, huge, yeah, huge moment, because it made clear that the SEC's authority in this space has limits. She also ruled that Ripple's sales on exchanges were not securities. That other distributions Ripple had made, such as donating XRP to charities or paying employees in XRP, were not securities either. She did find that certain sales by Ripple were historical sales by Ripple to institutional counterparties or securities.

So, after that order, you go to the next stage of the case, which is the remedies phase, which is when Judge Torres had to consider, okay, I found this one bucket of transactions to be securities transactions. What do I do with that? What are the penalties and the remedies that I'm going to issue here? And ultimately, after motion practice, she imposed an injunction against Ripple and she ordered a fine of $125 million to be paid to the SEC. After that order came out, judgments entered. Okay, now this case can be appealed. First up was the SEC. They indicated their intention to appeal the case fall of last fall, and soon thereafter, we filed a notice to cross-appeal.

Fast forward a bit—it's now early 2025, and the SEC has indicated its intent to dismiss its appeal. We haven't yet responded with our cross-appeal. But before we needed to do that, we actually entered into a settlement with the SEC. As part of the settlement, we agreed to drop our appeal, and the SEC agreed to join us in asking the court to dissolve the injunction and reduce the penalty Ripple is required to pay from $125 million down to $50 million.

$50 million or $50?

$50 million.

That money is currently being held in an escrow account, which is required when you file an appeal. Together with the SEC, we submitted a joint motion to Judge Torres requesting the relief I just described—namely, to reduce the penalty and dissolve the injunction.

Unfortunately, Judge Torres denied the motion a few weeks ago on procedural grounds. However, we refiled the motion with the SEC late last week, and it’s still pending with her now. So, more to come.

Ripple was one of the first big players sued in late 2020.

But over time, a lot of other big players and small players were sued as well in the crypto industry, and what we saw time and again was parties relying on our decision in efforts to try and convince and advocate for themselves in their respective lawsuits. And what was interesting was there was, you know, there was a sort of a split or different courts were looking at similar questions differently and coming to different conclusions. So you saw a judge in New York sort of reject the Ripple decision. You saw a judge in DC embrace it or, you know, be more in line with that decision. And I think one thing that's really interesting right now is, with the new administration, there's been a lot of change at the SEC in terms of rethinking their strategy on how they are going to approach crypto and crypto regulation, and a move away from this regulation-by-enforcement approach. That was very much the standard of the prior SEC, and so what we've seen is most, if not all, of the non-fraud crypto cases have been dismissed.

Right. And this is happening right at a time when Congress is starting to seriously think about giving the SEC the right guidelines and rules of the road. The SEC, the CFTC, yeah.

The Congress is leaning in on this space, which is really exciting for players in the industry who have, you know, new and old.

Yes, yeah. So a lot more to come. But, Deborah, before we let you go, we always love to end the show by asking our guests for a little bit of advice or looking forward. So you were talking earlier about how much you enjoy mentoring women, other lawyers. You're, you know, obviously a leader at this company in a pretty male-dominated industry. So, just in closing, any advice you'd share with young attorneys at the start of their career or particularly if they want to join crypto?

Yeah, I always tell people to find something that they care about. You spend a lot of time at work. Being a lawyer is, like many other jobs and careers, a lot, and so you want to believe in what you're doing, and if you do, it makes showing up for work and working as hard as you are so much more enjoyable. And beyond that, what I would say is to remember that kindness and humility go a long way, and humor, yes, try and inject humor. I mean, if I look back to those days right after we were sued by the SEC, what comes to mind is, despite how intense that time was, the teams we were working with internally were amazing and just being human beings and being kind and thoughtful and cracking a joke when it seems like things are tough goes a long way.

Really helps. Yeah, well, thank you, this has been a great conversation.

Yeah, thank you for having me.

And to all our listeners, remember to like and subscribe wherever you listen to your podcasts. Follow us on X at PentaGRP and on LinkedIn at PentaGroup. I'm your host, Bryan, here with Elan and, as always, thanks for listening to What's at Stake.