By Ripple CEO Brad Garlinghouse Criticizes SEC for Losing Focus on Investor Protection
Brad Garlinghouse, CEO of the US-based blockchain payments firm Ripple, has expressed strong criticism of the US Securities and Exchange Commission (SEC), accusing the agency of deviating from its core mission to protect investors.
Speaking with CNBC at Ripple’s Swell conference in Dubai last Thursday, Garlinghouse raised concerns about the SEC’s priorities, questioning whom the agency is working to protect through its regulatory actions.
Garlinghouse’s remarks follow 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.
Ripple scored a significant victory in July when 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.
In Dubai, Garlinghouse told CNBC that he sees this as a positive development for the entire crypto industry, not just Ripple.
He also noted that he expects a positive shift in the regulatory landscape going forward, and said he hopes the SEC’s actions will lead to federal laws governing digital currencies introduced by Congress, reducing the reliance on continuous litigation.
“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,” he said.
Highlighting the recent court ruling involving Grayscale’s planned conversion of its Bitcoin Trust to a spot Bitcoin exchange-traded fund (ETF), Garlinghouse emphasized the need for the SEC to reconsider its regulatory approach, moving away from what some have called “regulation through enforcement.”
“Generally, judges tend to be pretty down the middle and try to not 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,” the Ripple CEO said.
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