The chief executive of Ripple Labs, Brad Garlinghouse, is full of criticisms when it comes to the Securities and Exchange Commission (SEC) in the US. According to him, the agency has not been consistent when it comes to imposing regulations on crypto companies that operate in the country.
Ripple’s Legal Battle
On Thursday, Garlinghouse was in Toronto to attend a conference, where he spoke to the editor-in-chief of Wired. He talked about his company’s ongoing legal conflict with the regulatory authority. According to the federal agency, Ripple and its executives were involved in an unregulated offering of digital securities via the sales of the XRP token.
Garlinghouse pointed out that the federal regulator had given its approval for the public offering of renowned crypto exchange Coinbase last year in April, even though the exchange had the XRP token listed on its platform. The CEO said that the SEC decided to declare XRP security when they had sued Ripple Labs, but they did not have a problem with Coinbase getting publicly listed, even though the crypto exchange had not been registered as a broker-dealer.
The Ripple executive asserted that there a few contradictions in the stance of the SEC where the crypto space is concerned. According to Garlinghouse, the SEC is not making any effort into developing a clear set of new rules and regulations for the crypto space. Instead, the regulatory authority has decided that they want to regulate via enforcement, which is not the efficient way to go and would only stifle innovation in the country.
Complaints About US Regulators
Along with Garlinghouse, Chris Larsen, the co-founder of Ripple, as well as David Schwartz, who is the chief technology officer, have also made complaints against the regulatory authorities in the US. This was done before the lawsuit had been filed by the SEC against Ripple Labs in December 2020.
In October of the same year, Larsen had suggested that Ripple could consider moving out of the United States because of the authorities trying to use enforcement for regulatory purposes. Currently, the company’s headquarters are located in San Francisco, but it also has its offices in Wyoming and Dubai.
Gary Gensler, the chairman of the SEC, called the crypto space as the Wild West, but Garlinghouse disagreed with him. He said that the crypto asset class is highly volatile and that is what makes it different. But, he also said that volatility can be found in almost all asset classes and that a regulatory authority should not decide if consumers and businesses should access that volatility or not.
The legal battle between the SEC and Ripple Labs is still ongoing and no outcome has been reached as yet. However, Ripple is quite hopeful that the decision will be in their favor. The entire crypto space has been keeping an eye on the case because they believe it will set a precedent for how cryptocurrencies will be treated in terms of regulation and if they will be able to operate in the US, or not.