Brad Garlinghouse, the CEO of Ripple, blasted the SEC’s approach to cryptocurrency regulation on Thursday at the company’s Swell conference in Dubai. Garlinghouse told CNBC that the SEC’s lengthy legal battle with Ripple has caused them to “lose sight of their mission to protect investors.”
According to the lawsuit, Ripple sold its cryptocurrency, XRP, through an unregistered securities offering. According to Garlinghouse, the enforcement actions taken by the SEC are impeding the growth and potential of the cryptocurrency business by limiting innovation.
“The SEC consistently engages in the same behavior. And they believe that at some point they’ll receive a different result,” he remarked.
Garlinghouse cited a recent verdict by an appeals court that found the SEC had been “arbitrary and capricious” in denying Grayscale’s application for an ETF based on bitcoin as more evidence of the agency’s overreach.
These are scathing remarks: “Judges often aim to avoid controversy and tend to be fairly down the center. Therefore, I believe that eventually the SEC will have to take a step back and see that their strategy of enforcing regulations through litigation needs to change, according to Garlinghouse.
In place of ongoing litigation, he expects that the Ripple case would cause a “thawing of the permafrost” in crypto legislation and result in explicit federal rules established by Congress. The court-mandated 90-day remedies discovery process is the next crucial stage in Ripple’s case.
According to Garlinghouse, industry-wide regulation is necessary for blockchain and cryptocurrency to realize their full potential as a “wonderful sector with enormous promise” for the US economy.