Ripple CEO Brad Garlinghouse has criticized the United States Securities and Exchange Commission (SEC) for its handling of the case against Ripple. Garlinghouse took to Twitter on July 23 to express his disapproval of the SEC’s “regulation by enforcement” approach, which he believes has negatively impacted retail investors. He argued that the SEC’s assertion of authority in the cryptocurrency space has resulted in consumers suffering losses while the regulator continues to hold press conferences.
Garlinghouse’s comments came in response to recent statements from the SEC regarding a possible appeal in the case against Ripple. The SEC hinted at appealing the split-decision ruling that concluded XRP sales on exchanges did not meet the legal definition of a security. The regulator voiced its concerns with the decision in its ongoing case against Terraform Labs founder Do Kwon. SEC lawyers contested the ruling, asserting that the sales of XRP should have been considered securities. They also revealed their intention to recommend seeking further review.
In response, Garlinghouse criticized the SEC’s blaming of the judge for applying the law, calling it “absurd.” He emphasized the need for clear regulations rather than enforcement-based actions to protect retail investors. Ripple Labs chief legal officer Stuart Alderoty echoed Garlinghouse’s sentiments, comparing explaining XRP’s status as a non-security to trying to convince a flat earther that the world is round.
SEC Chair Gary Gensler also expressed disappointment over the court’s decision on the classification of XRP as a security. Gensler stated that the SEC would continue to evaluate this opinion.
The price of Ripple Labs’ XRP has seen significant growth, reaching $0.73 at the time of publication. This represents an increase of nearly 50% in the last month, according to data from TradingView.
Garlinghouse’s criticism shines a light on the ongoing battle between Ripple and the SEC, with both parties holding opposing views on the regulatory classification of XRP. The outcome of this case could have significant implications for the cryptocurrency industry and how regulations are applied to digital assets. The involvement of high-profile figures like Garlinghouse and Gensler further underscores the importance and complexity of these debates. It remains to be seen how the SEC will proceed and what potential impact it will have on Ripple and the wider cryptocurrency market.