The CEO of Ripple Labs has warned of the harm to the crypto industry if the U.S. Securities and Exchange Commission (SEC) is able to prevail in its lawsuit against Ripple over xrp. He cautioned that the SEC’s enforcement-centric approach to regulating crypto “is not a healthy way to regulate an industry.”
Ripple’s CEO on SEC Lawsuit, U.S. Crypto Regulation
Ripple CEO Brad Garlinghouse warned about harmful consequences to the crypto industry if the U.S. Securities and Exchange Commission (SEC) wins its lawsuit against him and his company over the sale of XRP in an interview with Bloomberg on Thursday.
“The SEC bringing the case against Ripple was not really just a case about Ripple or about XRP — It’s really about the industry,” Garlinghouse began. Asserting that the SEC is “playing offense and attacking” the entire crypto industry, the Ripple CEO stressed:
This is going to be pivotal for the whole industry.
He further warned that “if the SEC is able to prevail” in its lawsuit over XRP, more enforcement will be carried out against crypto firms. The securities watchdog recently took action against Kraken over the cryptocurrency exchange’s staking program, and Paxos over its issuance of stablecoin Binance USD (BUSD). Furthermore, SEC Chairman Gary Gensler believes that all crypto tokens other than bitcoin (BTC) are securities.
Citing the SEC’s enforcement-centric approach to regulating the crypto industry, Garlinghouse opined:
The macro headline for me is this is not a healthy way to regulate an industry.
The Ripple executive proceeded to explain that the SEC’s focus on enforcement differs from the regulatory approaches of other nations with regard to cryptocurrencies.
“We’re seeing in other countries where they’re doing the work right. They’re codifying. They’re creating a framework that allows an industry to grow while protecting consumers,” Garlinghouse detailed, adding:
I think that’s really what the U.S. is lagging.
Noting that a lot of crypto businesses are already moving offshore, Garlinghouse emphasized: “The sad reality is the U.S. really is already behind … This is not behind countries that we haven’t necessarily heard of. This is behind Australia, and behind the U.K., Japan, Singapore, Switzerland. There’s a lot of countries that have taken the time and thoughtfulness to create that clear rules of the road.”
Garlinghouse explained that when he first got involved in the tech industry in the late 1990s, “some were saying the internet should be banned.” He continued: “They were saying how the internet is being used for illicit purposes, but the U.S. government said: ‘no, no, no, we are going to create a framework.’ And that allowed entrepreneurs, that allowed investors to come in and look at the benefits to the United States on a geopolitical basis.”
Noting that the U.S. risks missing out on the “next evolution of technology around blockchain and crypto,” the Ripple boss warned:
The consumers are suffering … because you don’t have the same protections that the U.S. regulatory framework can provide.
The Ripple CEO previously expressed optimism regarding the XRP lawsuit. The securities regulator sued him and his company in December 2020 alleging that the sale of XRP was an unregistered securities offering. Garlinghouse has maintained that XRP is not a security, anticipating an outcome to the case this year, potentially within the first six months.
Do you agree with Ripple CEO Brad Garlinghouse about the SEC and U.S. crypto regulation? Let us know in the comments section below.