Ripple CEO criticizes SEC for stifling crypto innovation with aggressive enforcement

Ripple CEO Brad Garlinghouse said the U.S. SEC’s actions toward the crypto industry have failed in protecting investors and needs to reassess its regulatory strategy.

Speaking to CNBC’s Dan Murphy at the Ripple Swell conference in Dubai, Garlinghouse expressed concern about the SEC’s focus and questioned:

“Who are they protecting in this journey?”

The CEO said the watchdog’s enforcement approach to regulating the crypto industry has only stifled growth. He added that the industry needs a new tailor-made regulatory framework that properly considers the nuances of digital assets.

Court ruling against SEC

The criticism comes after a multi-year legal battle between Ripple and the SEC, which accused the blockchain company and its executives of conducting a $1.3 billion securities fraud by selling XRP to retail investors.

However, in a pivotal victory for Ripple in July, a judge ruled that XRP is not a security, marking a significant development in the ongoing case.

The CEO also referenced a recent victory for Grayscale, a digital asset manager, in the context of a Bitcoin ETF application. He highlighted that the federal judge presiding over the case had criticized the watchdog for being “arbitrary and capricious.”

According to Garlinghouse:

“Generally, judges tend to be pretty down the middle and try to not be dramatic — those are damning words.”

Garlinghouse said that the watchdog may finally reassess its regulatory strategy as the enforcement approach of only filing lawsuits has not worked in its favor and only led to stifling innovation in the U.S.

Federal laws needed

Garlinghouse expressed hope that the regulatory stance toward the digital assets industry will shift to a more positive note following these legal developments. He said the government needs to take a more proactive approach toward supervising the industry, starting with new digital asset laws.

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Author: Assad Jafri

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