Brad Garlinghouse, the CEO of Ripple, recently vented his severe dissatisfaction with the SEC’s (Securities and Exchange Commission) strategy in its continuing legal struggle with Ripple Labs on Twitter. Garlinghouse criticized the SEC’s “regulation by enforcement” approach, which he thought had a detrimental effect on individual investors.
The SEC’s actions against Ripple Labs sparked cryptocurrency industry controversy. The regulator deems Ripple’s XRP token as a security. A contentious legal battle resulted from Ripple’s insistence that XRP is a digital asset rather than a security.
An important topic has come up about protecting retail. The SEC created this mess by proclaiming it was the cop on the crypto beat when it had no legal jurisdiction Where’s that gotten us? Consumers left holding the bag in bankruptcy court while the SEC holds press conferences.
— Brad Garlinghouse (@bgarlinghouse) July 22, 2023
The SEC’s recent comments hinting at a potential appeal to the court’s split-decision order against Ripple Labs sparked Garlinghouse’s criticism. The SEC contended that the legal definition of security did not apply to retail sales of XRP on exchanges. They added that the court’s ruling, in this case, was flawed and needed to be reevaluated.
Garlinghouse asserted the SEC lacks legal authority in cryptocurrency regulation. He accused the SEC of overstepping its bounds. Garlinghouse highlighted consumer losses amid the SEC’s press conferences, emphasizing the regulator’s negative impact.
To safeguard small-scale investors, the Ripple Labs CEO stressed the need for clear regulatory guidelines. He called for comprehensive legislation to govern enforcement activities. He argued that such a strategy would give the cryptocurrency market much-needed clarity.
Garlinghouse and Ripple Leadership Critique SEC’s Handling of XRP Case
Stuart Alderoty, chief legal officer of Ripple Labs, commented on the situation as well. He compared attempts to persuade the SEC that XRP is not a security to “explaining the world is round to a flat earther”. Alderoty’s statement reflects the Ripple leadership’s dissatisfaction with the SEC’s handling of the issue.
Talking to someone who still doesn’t understand that the token itself is not the security is like explaining to a flat earther that the world is round.
— Stuart Alderoty (@s_alderoty) July 22, 2023
Midway through July, SEC Chair Gary Gensler voiced unhappiness with the court’s judgment over XRP’s securities status and said the regulator will keep examining it.
Amid the legal dispute, Ripple Labs’ XRP value rose to $0.73, indicating a 50% increase in the past month.
The SEC’s decision regarding Ripple Labs will have a significant impact on the cryptocurrency market. The unfolding case has drawn significant attention, underscoring the need for clear regulatory guidelines in the digital asset sector. Industry players closely monitor its developments.
The cryptocurrency community is watching the legal saga with interest, hoping for a resolution that would bring about the regulatory stability that is sorely needed and create an atmosphere that is favorable to investment and innovation in the Bitcoin industry.