Ripple CEO Brad Garlinghouse Criticizes SEC During Ripple Swell Conference
Brad Garlinghouse, the CEO of blockchain company Ripple, delivered a scathing critique of the U.S. Securities and Exchange Commission (SEC) at the company’s Ripple Swell conference in Dubai. During the event, Garlinghouse expressed his opinion that the SEC has lost sight of its mission to protect investors.
According to Garlinghouse, “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?” The SEC did not immediately respond to CNBC’s request for comment.
In 2020, the SEC accused Ripple and its executives of conducting a $1.3 billion securities fraud through sales of XRP to retail investors. The regulatory body alleged that Ripple failed to register an ongoing offer and sale of billions of XRP tokens to investors, depriving them of adequate disclosures about XRP and Ripple’s business.
However, in a pivotal victory for Ripple, a judge ruled in July 2023 that XRP is not in and of itself a security, and in October, the SEC dropped its securities law violation charges against Garlinghouse and Ripple executive Chris Larsen. The next key step in the case is the remedies discovery process, with the SEC having 90 days from November 9 to conduct remedies-related discovery, according to a proposed schedule submitted the SEC.
Garlinghouse expressed hope that the ongoing legal developments would pave the way for more favorable conditions for the cryptocurrency industry in the United States, allowing it to thrive in the country’s economy.
He also emphasized his desire for the crypto industry regulation in the U.S. to be established through federal laws introduced Congress, rather than through litigation and regulatory enforcement the SEC.
Ripple is a payments company specializing in cross-border money transfers through blockchain technology. The company’s RippleNet network is utilized financial institutions for sending funds from one country to another, and it leverages the XRP cryptocurrency for cross-border payments. Ripple’s technology enables currency conversion and eliminates the need for pre-funded accounts on the other side of a cross-border transaction.
Ripple’s XRP token, often associated with the company, functions as a “bridge” currency between fiat currencies during international transactions. However, the SEC’s contention that XRP should be classified as a security has been a significant point of conflict for the company.
Overall, Garlinghouse’s critique of the SEC’s approach to crypto regulation, coupled with the legal developments in Ripple’s case, reflects the complex and evolving landscape of cryptocurrency regulation in the United States.