The U.S. Securities and Exchange Commission (SEC) has been prioritizing “politics and power” over creating “sound policy,” Ripple CEO Brad Garlinghouse said in a July 15 interview with Bloomberg.
Reiterating his criticisms against the regulatory watchdog, Garglinghouse said that instead of providing clear rules for crypto, the SEC has been sowing confusion in the market. He remarked:
“…they [SEC] knew there was confusion and they actually did things that they knew would increase confusion and the only reason to do that is because this confusion actually masquerades as power to the SEC”
The ruling in the Ripple case, which held that XRP is not in itself a security, dispelled some of the confusion sowed by the SEC, he said. The ruling provided the entire U.S. market with much-needed clarity, and is, therefore, “also a win for the entire crypto industry,” he said.
Garglinghouse further stated that the Ripple decision cut short the “overreach” of SEC chair Gary Gensler, who claims most cryptocurrencies are securities. He added:
“Ironically, no other country on the planet thought that XRP is a security but it’s nice to have that clarity now for the market here in the United States.”
Ripple stood up to a ‘bully’
Garlinghouse stressed the significance of the Ripple ruling saying this is the “first time the SEC has lost a crypto case.” In fact, he said that the SEC has gone largely unchallenged because the regulator has been targeting smaller companies.
“I think the SEC has been a bully and they’ve gone after weak players who couldn’t mount a proper defense.”
Being a crypto giant, Ripple had the “fortitude” and “courage” to stand up to the SEC, Garlinghouse said. The crypto industry “needed someone to fight” because the SEC has been using regulation through enforcement as its primary tool, which is “not a good way to build a market,” he noted.
According to Garlinghouse, the SEC is not doing the hard work that other countries in Europe and elsewhere have put in to provide clear crypto rules. Regulatory clarity could help investors and entrepreneurs, he noted, adding that:
“…even now the SEC is more focused on bringing lawsuits as opposed to doing the work.”
SEC appeal could take years
According to some experts, like John Reed Stark, former chief of internet enforcement at the SEC, the Ripple ruling is “ripe for appeal” and likely to be overturned. However, Garlinghouse said that it could take the SEC years to file an appeal.
Moreover, Garlinghouse is “very optimistic” that even if the SEC filed for an appeal in the Second Circuit court, Ripple will win and solidify the recent judgment. His optimism is based on the fact that the SEC overreached its authority while claiming most cryptocurrencies are securities.
