In an interview with Bloomberg on Thursday, Ripple CEO Brad Garlinghouse sounded the alarm about possibly devastating results for cryptocurrency if the SEC prevails in its lawsuit against him and his firm over selling XRP.
More Sanctions Could be Imposed on the Crypto Industry if the SEC Wins
“The SEC bringing the case against Ripple was not really just a case about Ripple or aboutXRP— It’s really about the industry,” Garlinghouse began. Asserting that the SEC is “playing offense and attacking” the entire crypto industry, the Ripple CEO stressed: “This is going to be pivotal for the whole industry.”
He further warned that “if the SEC is able to prevail” in its lawsuit overXRP, more enforcement will be carried out against crypto firms. The securities watchdog recently took action againstKrakenover the cryptocurrency exchange’s staking program andPaxosover its issuance of stablecoin Binance USD (BUSD). Furthermore, SEC Chairman Gary Gensler believes thatall crypto tokensother than bitcoin (BTC) are securities.
Citing the SEC’s enforcement-centric approach to regulating the crypto industry, Garlinghouse opined: “The macro headline for me is this is not a healthy way to regulate an industry.”
US Regulators Are Different From The Rest Of The World
The Ripple executive proceeded to explain that the SEC’s focus on enforcement differs from the regulatory approaches of other nations about cryptocurrencies.
“We’re seeing in other countries where they’re doing the work right. They’re codifying. They’re creating a framework that allows an industry to grow while protecting consumers,” Garlinghouse detailed, adding: “I think that’s really what the U.S. is lagging.”
Noting that a lot of crypto businesses are already moving offshore, Garlinghouse emphasized: “The sad reality is the U.S. really is already behind … This is not behind countries that we haven’t necessarily heard of. This is behind Australia, the U.K., Japan, Singapore, and Switzerland. There’s a lot of countries that have taken the time and thoughtfulness to create that clear rules of the road.”
US Regulators Should Create a Crypto Framework
Garlinghouse explained that when he first got involved in the tech industry in the late 1990s, “some were saying the internet should be banned.” He continued: “They were saying how the internet is being used for illicit purposes, but the U.S. government said: ‘no, no, no, we are going to create a framework.’ And that allowed entrepreneurs and investors to look at the benefits to the United States on a geopolitical basis.”
Noting that the U.S. risks missing out on the “next evolution of technology around blockchain and crypto,” the Ripple boss warned: “The consumers are suffering … because you don’t have the same protections that the U.S. regulatory framework can provide.”
The Ripple CEO previously expressedoptimismregarding theXRPlawsuit. The SECsuedhim and his company in December 2020, alleging that the sale ofXRPwas an unregistered securities offering. Garlinghouse has maintained thatXRPis not a security, anticipating an outcome to the case this year, potentially within thefirst six months.
