Garlinghouse Criticizes SEC's Approach to Crypto

Garlinghouse Criticizes SEC’s Approach to Crypto

Time Stamp: June 20, 2023 7:40 AM
Source Node: 2141009

In a recent video statement, Ripple CEO Brad Garlinghouse took a strong stance against the U.S. Securities and Exchange Commission (SEC), accusing it of spreading confusion and stifling innovation in the crypto space.

Garlinghouse’s comments come in the wake of the unsealing of documents related to the now-infamous 2018 speech by former SEC official Bill Hinman. Hinman introduced new factors in his speech to determine if a token becomes sufficiently decentralized to be no longer considered a security. Garlinghouse argues that these documents reveal that senior officials at the SEC couldn’t agree on the law and warned Hinman that his speech would further confuse the public about the rules for crypto.

The Ripple CEO went further, suggesting that Hinman deliberately ignored the law and attempted to create new laws, a power reserved for Congress. He also pointed out that Hinman received millions of dollars in payments from his law firm, which was part of an alliance with vested interests in the speech.

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Garlinghouse criticized the SEC’s approach to enforcement, arguing that it has pursued actions against crypto players while professing open arms and calls for registration. He accused the SEC of lying about their so-called guidance and using the confusion they created to regulate through enforcement.

Reflecting on Ripple’s own experience with the SEC, Garlinghouse shared that the company spent years proactively engaging with the SEC, answering every question they had. Despite this, the SEC hit Ripple with a surprise Wells notice, considering suing them for breaking securities laws without providing specifics.

Garlinghouse warned that the SEC is looking to kill crypto innovation in the U.S. and accused its current chair of weaponizing the lack of regulatory clarity to exert jurisdiction over the entire crypto space. He described this as putting politics over people and the pursuit of power over sound policy.

As Ripple’s lawsuit comes to a close, Garlinghouse emphasized that the fight for clarity must continue. He thanked his colleagues at Ripple, his family, friends, and the XRP army for their support over the past two and a half years.

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