Ripple Its CEO, Brad Garlinghouse, has strongly criticized the SEC for its approach to regulating cryptocurrencies. However, he called it “regulation by sanction”.
Garlinghouse argued that the SEC’s overstepping and lack of clear legal mandate had negative consequences for retail investors. Setting clear rules and crypto- called for legislation to protect retail participants in the industry.
Brad Garlinghouse tweeted:
An important issue regarding the protection of retail came to the fore. The SEC has created this mess by declaring that it is the police on crypto even though it has no legal authority, and where has that brought us?
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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
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Ripple Labs Litigation and Potential SEC Appeal
Garlinghouse’s SECTheir criticism of . The SEC has expressed dissenting views in the lawsuit filed against Terraform Labs founder Do Kwon.
According to the SEC, the court’s decision that retail sales of XRP on exchanges does not constitute a security was wrong. SEC lawyers argued that these sales should be classified as securities.
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Garlinghouse’s Response to SEC’s Comments
Brad Garlinghouse vehemently dismissed the SEC’s comments, calling them “nonsense.” He dismissed the idea of impeaching the judge for enforcing the law. On the other hand, he emphasized the need for legislative action to ensure clarity in the crypto industry.
Brad Garlinghouse stated:
It is absurd to blame a Judge for faithfully enforcing the law. We all know that the only way to set clear rules and protect retail is legislation, not more enforcement regulations. Glad to see more members of Congress like RepRitchie, @PatrickMcHenry advocating this.
Garlinghouse’s criticism highlights his belief that regulation should be based on well-defined legislation rather than the SEC’s sanctions-oriented approach.
SEC’s Disappointment and Ongoing Evaluation
SEC Chairman Gary Gensler expressed his disappointment with the court’s decision regarding XRP’s security status. However, he confirmed that the SEC will continue to evaluate the decision. Gensler’s statements mean the regulator will closely monitor the legal environment surrounding XRP and may take further action.