CEO of Ripple Warns of Damage to Crypto Industry if SEC Wins XRP Lawsuit

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Last Updated on March 6, 2023 by Bitfinsider

In an interview on Thursday, Ripple CEO Brad Garlinghouse forewarned of negative repercussions for the cryptocurrency sector if the U.S. Securities and Exchange Commission (SEC) prevails in its legal action against him and his business over the selling of XRP.

The SEC’s lawsuit against Ripple was really about the business as a whole, not just Ripple or XRP, according to Garlinghouse. The CEO of Ripple emphasized that the SEC is “playing offense and attacking” the entire crypto sector. He stressed: “This is going to be pivotal for the whole industry.”

He added a warning that more enforcement actions would be taken against cryptocurrency companies “if the SEC is able to prevail” in its legal battle over XRP. The securities regulator recently took action against Paxos and Kraken for issuing the stablecoin Binance USD (BUSD) and the cryptocurrency exchange’s staking program, respectively. Additionally, according to SEC Chairman Gary Gensler, all cryptocurrency assets other than Bitcoin (BTC) are securities.

Garlinghouse stated the following in support of the SEC’s enforcement-focused strategy to regulating the crypto industry: “The macro headline for me is this is not a healthy way to regulate an industry.”

The Ripple executive continued by describing how the SEC’s emphasis on enforcement is different from other countries’ legislative strategies with regard to cryptocurrencies.

“We’re seeing in other countries where they’re doing the work right. They’re codifying. They’re creating a framework that allows an industry to grow while protecting consumers,” according to Garlinghouse. He added: “I think that’s really what the U.S. is lagging.”

The U.S. is already behind, Garlinghouse stressed, noting that many cryptocurrency companies have already relocated abroad. This is not a secret from nations that we may not have heard of. This places it behind Switzerland, the United Kingdom, Japan, Australia, and the United States. Many nations have taken the time and care to establish these precise traffic regulations.

Garlinghouse recalled that “some were saying the internet should be banned” when he first entered the tech sector in the late 1990s. The US government responded: “No, no, no, we are going to create a framework.” They were saying how the internet is being used for illegal purposes. And that made it possible for businesspeople and investors to enter the market and assess the advantages for the United States from a strategic standpoint.

The head of Ripple cautioned that the United States runs the risk of losing out on the “next evolution of technology around blockchain and crypto.”

On the subject of the XRP lawsuit, the CEO of Ripple earlier expressed optimism. In December 2020, the securities regulator filed a lawsuit against him and his business, claiming that the selling of XRP was an unregistered securities offering. Garlinghouse has insisted that XRP is not a security and has predicted that the matter will be resolved this year, possibly in the first half.

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