The CEO of Ripple says the SEC has stumbled in its investor protection duty.
“I think the SEC, in my opinion, has lost sight of their mission to protect investors,” Brad Garlinghouse said of the Securities and Exchange Commission (SEC) in an interview with CNBC published Saturday (Nov. 11). “And the question is, who are they protecting in this journey?”
A spokesperson for the SEC declined to comment when reached by PYMNTS.
“One of the things that people talk about is, one of the definitions of insanity is doing the same thing over and over again, and thinking you’ll get a different outcome, the SEC is doing the same thing over and over again,” Garlinghouse added. “And they think, I guess, they’re gonna get a different outcome at some point.”
Garlinghouse is no stranger to tangling with the SEC, which sued Ripple and its executives in 2020 for securities law violations. The regulator accused Ripple of failing to register an ongoing offer and sale of billions of XRP tokens to investors.
Ripple won a crucial victory — for itself and the crypto sector as a whole — in July when a judge found that XRP is not a security. The ruling has “far-ranging repercussions across the digital asset ecosystem, which has long argued that its tokens do not represent securities contracts,” PYMNTS wrote soon after.
The SEC later lost its bid to appeal that decision. Last month, the commission dropped its charges against Garlinghouse and fellow Ripple executive Chris Larsen, though its case against the company continues.
“I think it is a positive step for the industry, not just for Ripple, not just for Chris and Brad, but for the whole industry, that the SEC has been put in check in the United States,” Garlinghouse said.
“And I’m hopeful this will be a thawing of the permafrost in the United States for really seeing an amazing industry that has immense potential to thrive in the largest economy in the world.”
The SEC’s attitude toward the crypto sector has previously caused Garlinghouse to say that the company was focusing on other jurisdictions for its hiring.
Interviewed in September at the Token2049 conference in Singapore, he said Ripple plans to conduct 80% of its hiring from countries he argued are better at regulating cryptocurrency.
“It’s super frustrating that you see markets like we have here in Singapore … where the governments are partnering with the industry, and you’re seeing leadership providing clear rules, and you’re seeing growth,” he said. “And frankly that’s why Ripple is hiring there.”