Brad Garlinghouse, CEO of Ripple, expressed his opinion to CNBC's Dan Murphy at the Ripple Swell event in Dubai that the SEC has neglected its purpose of safeguarding investors. In July, Ripple attained a groundbreaking victory when a judge decided that XRP is not a security. The next phase of the lawsuit is the remedies discovery process. Garlinghouse wishes that the U.S. progresses from a state of regulation determined by lawsuits to one in which regulations for digital currencies are created by Congress.
Ripple's CEO Brad Garlinghouse had some strong criticism for the U.S. Securities and Exchange Commission (SEC) during a CNBC interview at the Ripple Swell conference in Dubai. He believes that the agency has strayed from its mission to protect investors. When contacted by CNBC, the SEC declined to comment. The SEC had accused Ripple and its executives of committing a $1.3 billion securities fraud earlier in 2020, but a judge dismissed the charge, ruling that XRP is not a security. After this, the SEC was denied a request to appeal. In October, the SEC also dropped charges against Garlinghouse and another Ripple executive. Garlinghouse expressed optimism that the SEC's new limitations will benefit the whole blockchain industry. He is hopeful that this will lead to a “thawing of the permafrost” in the U.S. and allow blockchain to reach its potential.
Ripple CEO Brad Garlinghouse is hopeful that instead of digital currencies being governed by a steady sequence of legal proceedings, the U.S. will come up with federal regulations. "It's like insanity - doing the same thing over and over and expecting a different outcome. That's what the SEC appears to be doing," he said. He then referred to Grayscale's triumph at the hands of a U.S. federal judge, who stated that the SEC had been "arbitrary and capricious" in turning down the firm's crypto ETF application. Garlinghouse thinks that the SEC needs to contemplate their "regulation through enforcement" action, which only consists of filing court cases.
Ripple is a payments technology company that focuses on international money transfers through blockchain, a data platform that records financial transactions across many computers. RippleNet is utilized by financial institutions to move money between two nations. Additionally, Ripple uses XRP, a cryptocurrency, to streamline cross-border payments. The XRP token, which has become associated with Ripple, acts as a universal currency when transferring funds overseas. For example, the U.S. dollars of an individual sending money to Mexico can be converted into XRP and then into Mexican pesos. What's unique about Ripple is that it does not require the user to have an account pre-funded on the other side of the transfer.
Though Ripple's purpose for XRP is to facilitate international payments, it is more commonly known for its value as an investment asset. The 2018 crypto market downturn caused regulatory bodies to take notice of the risks that digital currencies posed to retail investors. While the majority of XRP is owned by Ripple, tokens are released to both institutional and retail investors every quarter. To prevent its XRP tokens from being declared a security, Ripple argues that it should be a currency or commodity. If not, Ripple will need to follow a long list of regulations, which can be costly.
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