- Ripple CEO, Brad Garlinghouse, criticizes SEC for losing focus on investor protection.
- Garlinghouse emphasized the need for the SEC to reassess its regulatory approach, moving away from a pattern of enforcement through lawsuits.
During the recently concluded Ripple Swell conference in Dubai, the company’s CEO Brad Garlinghouse expressed his thoughts on the role of the United States Securities and Exchange Commission (SEC) in safeguarding customers from rogue actors.
In an interview, Garlinghouse told CNBC’s Dan Murphy that, in his judgment, the SEC has deviated from its commitment to investor protection, calling the agency’s goals into doubt.
“I think the SEC, in my opinion, has lost sight of their mission to protect investors. And the question is, who are they protecting in this journey?” Garlinghouse told CNBC.
Ripple’s Victory Is a Step Forward for the Industry
Garlinghouse’s conclusion resulted from the SEC’s enforcement activities against the crypto industry, since the agency has chosen a litigation approach to regulating the nascent economy rather than cooperating with Congress to develop appropriate crypto rules.
In 2020, the Financial Industry Regulatory Authority sued Ripple and two officials, including the CEO, for organizing a $1.3 billion securities fraud by selling XRP to individual investors in the United States.
The complaint focused on Ripple’s inability to register the continuing sale of XRP tokens, which left investors in the dark regarding the digital asset and Ripple’s commercial activities.
After more than two years of legal wrangling between the SEC and Ripple, US District Judge Analisa Torres in Manhattan declared in July that XRP is not a security and does not exhibit the characteristics of a security token.
Following the denial of the SEC’s request for an interlocutory appeal, the agency dismissed securities law violations charges against Garlinghouse and another Ripple executive, Chris Larsen, in October.
Reflecting on the changes, Garlinghouse voiced hope not only for Ripple but for the entire industry. He sees the SEC’s reining in as a positive step that will pave the road for the crypto business to thrive in the United States.
“I think it is a positive step for the industry, not just for Ripple, not just for Chris and Brad, but for the whole industry, that the SEC has been put in check in the United States. And I’m hopeful this will be a thawing of the permafrost in the United States for really seeing an amazing industry that has immense potential to thrive in the largest economy in the world,” Garlinghouse told CNBC.
Ripple Will Hire 80% of its Employees From Outside the United States
Garlinghouse cited comparisons between the SEC’s regulatory strategy and other litigation conflicts in the business in criticizing the SEC’s regulatory strategy. The Ripple CEO cited Grayscale’s victory in a Bitcoin exchange-traded fund (ETF) case, in which a federal judge accused the SEC of being “arbitrary and capricious.”
Garlinghouse stressed the importance of the SEC rethinking its regulatory approach and shifting away from a practice of enforcement through lawsuits.
“Generally, judges tend to be pretty down the middle and try not to be dramatic — those are damning words. So I think at some point the SEC has to step back and realize that their regulatory approach through enforcement, let’s bring lawsuits, has to break,” he said.
Garlinghouse claimed that Ripple had shifted its recruitment focus to other countries as a result of the SEC’s anti-industry regulatory stance.
During a September interview at the Token2049 conference in Singapore, he revealed the company’s strategy to hire 80% of its workers from nations he deemed more proficient in crypto regulation.
Garlinghouse expressed his frustration by pointing to nations like Singapore, where governments work with the industry, offer precise restrictions, and see significant growth.
“It’s super frustrating to see markets like we have here in Singapore … where the governments are partnering with the industry, and you’re seeing leadership providing clear rules and growth. And frankly, that’s why Ripple is hiring there,” explained the CEO.
Disclaimer: The information provided is not trading advice. Bitcoinworld.co.in holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.