In a bold critique of the Securities and Exchange Commission’s (SEC) regulatory strategy, Ripple CEO Brad Garlinghouse has condemned what he calls the SEC’s “regulation through enforcement”, asserting that the agency prioritizes hiring lawyers to prosecute the crypto industry rather than establishing clear regulatory guidelines.
Garlinghouse’s comments came during an interview with CNBC at the World Economic Forum in Davos. Notably, the SEC’s recent approval of spot Bitcoin exchange-traded funds (ETFs) for U.S. public trading served as a backdrop for the discussion. Garlinghouse acknowledged the significance of the ETF approval, stating that it marks further validation from institutions and a government entity, indicating the increasing acceptance of crypto assets in mainstream finance.
Ripple, known for providing blockchain technology to global financial institutions, focuses on facilitating cross-border settlements for banks and payment service providers. Garlinghouse highlighted the role of Ripple in making these settlements faster and more cost-effective through blockchain technology.
The CEO expressed concerns about the SEC’s regulatory actions against various crypto firms, including Ripple, Grayscale, Coinbase, Kraken, and Binance, over the past three years. He emphasized that most crypto-related companies want to adhere to established regulations but face challenges due to U.S. regulators’ lack of clear guidelines. According to him, this was one reason Ripple continued to thrive outside of the U.S., with 95% of its customers coming from other jurisdictions.
Further, while acknowledging global efforts to regulate the crypto space, Garlinghouse pointed out that the United States lags behind in this regard.
“Most of the countries around the world have learned in. Even European union 27 countries have come together to create a construct for how crypto should be regulated. In the United States, we haven’t done this.” said Garlinghouse.
In a surprising twist, Garlinghouse suggested leveraging artificial intelligence, specifically mentioning ChatGPT, to formulate effective regulatory strategies for the U.S. crypto industry. He humorously proposed “typing into ChatGPT”, suggesting that it could potentially yield more insights than the SEC’s current approach.
The Ripple CEO also criticized SEC Chairman Gary Gensler, accusing him of pursuing a personal agenda rather than acting in the best interest of the public. Notably, earlier this week, Garlinghouse labeled the SEC boss a “political liability” criticizing his track record in regulating the crypto industry.
“I do think the chair of the SEC, Gary Gensler, is a political liability in the United States. And I think he’s not acting in the interests of the citizenry, he’s not acting in the interests of the long-term growth of the economy, and I don’t understand it.” Garlinghouse tweeted on Tuesday