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Ripple CEO criticizes SEC’s crackdown on the crypto scene, blames the agency for industry mess, and calls for legislative clarity to protect investors.
Brad Garlinghouse, the Chief Executive Officer of Ripple CEO, recently criticized the US regulator on Twitter concerning protecting retail investors in the crypto space.
He expressed that the mess the crypto industry finds itself in is a result of the Securities and Exchange Commission (SEC) overstepping its legal boundaries and claiming authority over cryptocurrencies without proper jurisdiction.
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
Garlinghouse stated that the SEC’s overreach has left consumers in a dire situation, grappling with bankruptcy while the agency merely holds conferences. Furthermore, he noted the absurdity of the blame pinned on the US judge for ruling that XRP is not a security.
“It’s absurd to blame a Judge for faithfully applying the law,” Garlinghouse stated, implying that the responsibility lies with the SEC’s misguided regulatory stance.
He stressed the need for clear legislative rules rather than relying on enforcement-driven regulation, believing it to be the only way to safeguard retail investors effectively.
The Ripple CEO commended Congress members like Ritchie Torres and Patrick McHenry for advocating legislative measures to protect the crypto space.
Ripple CLO Weighs in
Stuart Alderoty, Ripple’s Chief Legal Officer, also weighed in on the matter, asserting that the SEC’s jurisdiction is limited to securities. He noted that attempting to exercise authority over non-securities is nothing more than a political power play, causing harm rather than benefit.
“It helps no one; it hurts everyone,” the lawyer proclaimed.
A securities agency only has jurisdiction over securities. No security, no role for the SEC.
Pretending to have jurisdiction when there is none, is simply a political power play. It helps no one; it hurts everyone. https://t.co/OhNSaDuJ26
— Stuart Alderoty (@s_alderoty) July 22, 2023
Crypto Community Reacts
Also, John E Deaton, Founder of Crypto-Law.us, provided his perspective. He defended Judge Torres in the recent ruling clearing XRP’s alleged security status, stating that she was merely performing her duty by applying a 1946 test to evaluate modern-day blockchain technology.
Deaton pointed out that criticism of the result might stem from the outdated nature of the security contract test when applied to today’s innovative tech landscape. He firmly placed the blame on the SEC for the situation at hand.
Judge Torres did exactly her job and applied a 1946 test to modern day blockchain technology. Some people don’t like the result and call it perverse or backwards. Maybe that’s what happens when applying a 76 year old test to modern day tech. AI next? This is the SEC’s doing. https://t.co/mk5096jO4f
— John E Deaton (@JohnEDeaton1) July 22, 2023
Another observer noted the fundamental disparity between cryptocurrencies and traditional securities and banking regulations. The individual stressed the need to encourage innovation through legislative changes and regulatory sandboxes rather than stifling growth with outdated approaches.