Ripple CEO Brad Garlinghouse expressed his dissatisfaction with the U.S. Securities and Exchange Commission’s (SEC) approach to the cryptocurrency industry, noting that it has failed in protecting investors. Speaking at the Ripple Swell conference in Dubai, Garlinghouse questioned the SEC’s focus, asking, “Who are they protecting in this journey?” He believes that the SEC’s enforcement approach has hindered industry growth and calls for a new regulatory framework tailored to the unique characteristics of digital assets.
The criticism from Garlinghouse comes in the midst of a multi-year legal battle between Ripple and the SEC. The SEC accused Ripple and its executives of conducting a $1.3 billion securities fraud by selling XRP to retail investors. However, in a significant victory for Ripple in July, a judge ruled that XRP is not a security, marking a turning point in the ongoing case. Garlinghouse also highlighted a recent win for Grayscale, a digital asset manager, where a federal judge criticized the SEC for being “arbitrary and capricious.” He views these legal developments as a sign that the SEC may reconsider its regulatory strategy.
Garlinghouse expressed hope that the regulatory stance toward the digital asset industry would become more positive following these legal developments. He emphasized the need for the government to adopt a proactive approach to industry supervision and called for the introduction of federal laws governing digital currencies. Garlinghouse believes that relying on litigation to determine crypto regulation stifles innovation and suggested that Congress should take the lead in establishing clear and stable regulations for the industry. He reiterated that XRP should not be considered a security, asserting that federal laws could bring much-needed clarity to the market.
As the legal battle between Ripple and the SEC continues, the next key step is the remedies discovery process. The SEC has 90 days from November 9th to conduct related discovery, as outlined in a proposed schedule.
Ripple CEO Brad Garlinghouse strongly criticizes the SEC’s regulatory strategy, arguing that it fails to protect investors and stifles industry growth. He highlights the need for a new regulatory framework that considers the nuances of digital assets. Garlinghouse hopes for a shift in the regulatory stance toward the digital asset industry, emphasizing the importance of proactive supervision and the introduction of federal laws governing digital currencies. As the legal battle between Ripple and the SEC unfolds, the remedies discovery process will be crucial in determining the next steps in the case.
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