Brad Garlinghouse, the CEO of Ripple, a US-based blockchain payments firm, has strongly criticized the US Securities and Exchange Commission (SEC), accusing the agency of straying from its primary mission to protect investors.
During an interview with CNBC at Ripple’s Swell conference in Dubai, Garlinghouse expressed concerns about the SEC’s priorities and questioned whom the agency is working to safeguard through its regulatory actions.
Garlinghouse’s comments come in the wake of the SEC’s 2020 accusation against Ripple and its executives, alleging a $1.3 billion securities fraud related to the initial sale of XRP tokens to retail investors. In a significant development in July, a judge ruled that XRP “is not in and of itself” a security.
In October, the SEC dropped securities law violation charges against Garlinghouse and Ripple co-founder Chris Larsen. These events highlight the ongoing legal battles and regulatory challenges faced by Ripple in the crypto space.
In Dubai, Brad Garlinghouse told CNBC that he views the recent developments with Ripple and the SEC as a positive development for the entire crypto industry, not just for Ripple.
He expressed optimism about a positive shift in the regulatory landscape and expressed hope that the SEC’s actions will prompt Congress to introduce federal laws governing digital currencies, reducing the reliance on continuous litigation. Garlinghouse stated, “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 thrive in the largest economy in the world.”
Pointing to a recent court ruling involving Grayscale’s planned conversion of its Bitcoin Trust to a spot Bitcoin exchange-traded fund (ETF), Garlinghouse underscored the need for the SEC to reconsider its regulatory approach, moving away from what some have criticized as “regulation through enforcement.” He remarked, “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 approach of regulation through enforcement, let’s just bring lawsuits, that has to break.”
