Brad Garlinghouse said that the SEC’s decision to regulate via enforcement is inefficient and has hampered innovation in the United States.
The chief executive officer of Ripple Labs, Brad Garlinghouse, has said that the United States Securities and Exchange Commission (SEC) has incorrectly implemented laws on crypto businesses in the nation.
Thursday at the Collision conference in Toronto, Garlinghouse told Wired’s editor-in-chief about Ripple’s ongoing legal battle with the SEC, in which the federal regulator has alleged the company’s executives conducted a “unregistered, ongoing digital asset securities offering” with XRP token sales. Garlinghouse made reference to the SEC’s clearance of Coinbase’s initial public offering in April 2021, despite the fact that the cryptocurrency exchange was already listing XRP at the time.
“The SEC seems to have taken the stance when they sued us that ‘XRP is a securities and always has been,’ yet they allowed Coinbase’s IPO despite the fact that Coinbase is not a licensed broker-dealer,” the CEO of Ripple said. There are various inconsistencies inside the SEC due to the organization’s lack of knowledge of left from right. Garlinghouse continued:
Instead of defining a new set of clear rules and regulations, the Securities and Exchange Commission (SEC) has decided to regulate via enforcement, which is inefficient and has, in my opinion, hampered innovation in the United States.
Garlinghouse, co-founder of Ripple Chris Larsen, and chief technical officer David Schwartz have all lodged complaints against U.S. authorities before too and after the SEC’s December 2020 lawsuit filing against the company. Ripple is now based in San Francisco, with other offices in Dubai and Wyoming. Larsen said in October 2020 that Ripple may consider leaving the United States due to the wider strategy of “regulation by enforcement”; the company also has offices in Dubai and Wyoming.
In response to SEC head Gary Gensler’s description of the industry, Garlinghouse said, “I don’t believe [crypto] is at all the Wild West.” “I believe crypto to be a very volatile asset class […]” All asset classes have a certain degree of volatility; I do not believe it is a regulator’s responsibility to define how consumers and companies should access this volatility.
Many anticipate that the outcome of the court dispute between Ripple and the SEC will create a precedent for the regulatory regulation of cryptocurrencies in the United States.
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