The CEO of Ripple Labs, Brad Garlinghouse, has accused the US Securities and Exchange Commission (SEC) of failing to streamline the crypto regulatory framework in the US, stifling innovation.
Garlinghouse spoke to the chief editor at Wired at the Collision conference in Toronto, where he addressed the ongoing lawsuit between the SEC and Ripple. Ripple was sued by the SEC in December 2020 over an “unregistered, ongoing digital asset securities offering.” According to the SEC, XRP is a security and not a token.
Garlinghouse referred to inconsistencies with the SEC’s regulations in the crypto space. The executive noted that while the SEC approved Coinbase’s public offering early last year, the exchange had listed XRP.
“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’s some contradictions here of the SEC almost now, within its organization, knowing left hand right hand,” Garlinghouse said.
The Ripple executive also said that the SEC was not focused on setting clear rules and regulations in the sector. Instead, the institution was introducing regulations through enforcement, which lacked efficiency. This, according to Garlinghouse, “stifled innovation in the United States.”
The case between Ripple and SEC
The case between Ripple and the SEC has been going on for two years now, and there is no clear indication of how the lawsuit will end. While Ripple has recorded some wins, the SEC has put up a strong fight. However, the results of this case are expected to set precedence for crypto regulations in the US.
Besides Garlinghouse, other Ripple executives have also commented on the lawsuit. Ripple’s co-founder, Brad Garlinghouse, and the company’s CTO, David Schwartz, have leveled complaints against US regulatory bodies because of this lawsuit.
In October 2020, Larsen said that Ripple could leave the US market because of the lack of clear guidelines. Garlinghouse has also criticized the remarks of SEC Chair Gary Gensler about crypto being the “Wild West.” Gensler said that while crypto was volatile, all asset classes also had some level of volatility.
The SEC Chair has previously said that most cryptocurrencies were securities. However, he has admitted that Bitcoin could be classified as a commodity that could be regulated by the Commodity Futures Trading Commission (CFTC).
