The chief executive officer of Ripple Labs, Brad Garlinghouse, has alleged that the US Securities and Exchange Commission (SEC) has inconsistently imposed some regulations on crypto companies in the nation.
While speaking to Wired editor-in-chief at the Collision conference in Toronto on June 23, Garlinghouse commented on Ripple’s ongoing legal battle with the SEC, where the federal regulator has claimed that the firm’s executives executed an “unregistered, ongoing digital asset securities offering” through XRP token sales.
Garlinghouse cited the SEC’s approval of Coinbase’s public offering in April 2021 although the cryptocurrency exchange listed XRP at the time. He stated:
“The SEC now seems to take the position when they sued us that ‘XRP is a security and always has been’, but they approved Coinbase going public even though Coinbase is not a registered broker-dealer. There are some contradictions here of the SEC almost not, within its organization, knowing left hand, right hand.”
“The SEC, instead of doing the hard work to define a new set of clear rules, a new set of clear regulations […] they instead decide we’re going to do regulation through enforcement, which is not efficient and I think has stifled innovation in the United States.”
Garlinghouse together with Ripple co-founder Chris Larsen and chief technology officer David Schwartz have teamed up to level complaints against United States regulators before and after the SEC filed its lawsuit against the company in December 2021.
Ripple’s CEO commented further:
“The SEC [decided] to do regulation through enforcement, which is not efficient and I think has stifled innovation in the United States.”
Larsen said in October 2021 that Ripple may consider leaving the United States behind given many of the authorities’ policies of “regulation through enforcement”. Currently, the company is headquartered in San Francisco but has active offices in Wyoming and Dubai.
While responding to SEC chair Gary Gensler’s characterization of the space, Garlinghouse stated:
“I don’t think [crypto is] the Wild West at all. I think crypto certainly is a volatile asset class […] All asset classes have certain volatility — I don’t think it’s a regulator’s job to determine how that volatility should be accessed by consumers, by businesses.”
The court case between Ripple and SEC is continuing, with most people expecting the results to set a precedent for the regulatory environment for cryptos in the US.
