Ripple CEO Criticizes SEC Over ‘Inconsistencies’ in Crypto Regulations

Brad Garlinghouse, the CEO of Ripple Labs, has claimed that the United States Securities and Exchange Commission, or SEC, has inconsistently imposed regulations on crypto businesses in the country.

Speaking to Wired’s editor-in-chief at the Collision conference in Toronto on Thursday, Garlinghouse pointed to Ripple’s ongoing legal battle with the SEC, in which the federal regulator has alleged that company executives conducted a “securities offering of ongoing and unregistered digital assets” with XRP Token Sale. Garlinghouse referenced the SEC’s approval of Coinbase’s public offering in April 2021 despite the crypto exchange listing XRP at the time.

“The SEC now seems to take the position when they sued us that ‘XRP is a security and always has been,’ but approved of Coinbase going public even though Coinbase is not a registered broker-dealer,” said the CEO of Ripple. “There are some contradictions here that the SEC hardly, within their organization, knows the left hand, the right hand.” Garlinghouse added:

“The SEC, instead of doing the hard work to define a new set of clear rules, a new set of clear regulations […] instead they decide that we are going to do regulation through enforcement, which is not efficient and I really think it has stifled innovation in the United States.”

Garlinghouse, Ripple co-founder Chris Larsen, and CTO David Schwartz filed complaints against US regulators before and after the SEC filed its lawsuit against the company in December 2020. Larsen suggested in October 2020 that Ripple might consider leaving the US behind given many authorities’ policy of “regulation through application”: the company is currently headquartered in San Francisco, but also has offices in Dubai and Wyoming.

Related: Ripple Lawyer Criticizes SEC for Trying to Destroy and Bankrupt Crypto

“I don’t think so [crypto is] the Wild West at all,” Garlinghouse said, responding to SEC Chairman Gary Gensler’s characterization of the space. “I think cryptocurrencies are certainly a volatile asset class […] All asset classes have some volatility; I don’t think it’s a regulator’s job to determine how consumers and businesses should access that volatility.”

The court case between Ripple and the SEC is still ongoing, with many hoping the results will set a precedent for the regulatory treatment of cryptocurrencies in the United States.