The Chief Executive Officer of Ripple, Brad Garlinghouse, has voiced his disagreement with the regulatory posture taken by Jay Clayton, who formerly served as Chair of the US Securities and Exchange Commission (SEC). This criticism surfaced in response to statements made by Clayton during an interview with CNBC on June 29, 2023. Clayton was discussing the SEC’s more aggressive legal stance against corporations, especially those operating in the cryptocurrency industry.
The Securities and Exchange Commission (SEC) started taking a number of regulatory measures against cryptocurrency organizations and exchanges at the beginning of 2023 in an effort to safeguard investors. The regulatory environment has been significantly disrupted as a result of these moves, which has increased the level of legal uncertainty for a variety of crypto organizations. In an interview with CNBC, Clayton said that legal action should only be conducted against corporations that have good legal grounds, and he emphasized that regulatory agencies should provide claims and policies that are capable of withstanding the examination of a court.
In his response to Clayton’s interview, Garlinghouse pointed out the irony of the situation, particularly in light of the fact that the SEC had previously initiated a case against Ripple when Clayton was in charge of the agency. Ripple, Garlinghouse, and Christian Larsen, the co-founder of Ripple, were accused in a lawsuit that was filed in December 2020 of arranging a “unregistered, ongoing digital asset securities offering,” and it was claimed that they made more than $1.3 billion from the sale of XRP. Garlinghouse brought out the inconsistency between Clayton’s words and his actions and emphasized the flimsy legal foundation of the SEC’s case against Ripple, which intended to categorize XRP as a security. He did this by pointing out the discrepancy between Clayton’s words and his actions.
The disclosure of Clayton’s remarks from June 2023 has emerged as a topic of conversation among the parties engaged in the current court procedures, which are still ongoing. The Securities and Exchange Commission (SEC) submitted a petition in October asking the court to dismiss the allegations against Garlinghouse and Larsen without prejudice, which further stirred the current discussion about the regulatory environment for cryptocurrencies.