Brad Garlinghouse Criticizes U.S. Financial Regulator
In a video shared on Twitter, Ripple CEO Brad Garlinghouse voiced his belief that the United States financial oversight agency acted with “undisguised malfeasance.”
The Larger Battle Ahead for Ripple and Industry
While Ripple's legal dispute with the United States Securities and Exchange Commission (SEC) seems to be drawing to an end, Garlinghouse has stated that it marks the beginning of a wider industry struggle and the pursuit of regulatory transparency "must persevere."
Unsealed Hinman Documents Stir Controversy
After the unveiling of the Hinman Documents on June 13, in connection with the ongoing litigation between Ripple and the SEC, Garlinghouse took to Twitter to discuss the lawsuit's progression and express his discontent with the organization.
In a video posted on June 17, Garlinghouse stated that the Hinman documents reveal the SEC’s intent to “intentionally sow discord about the regulations, exploiting the confusion via enforcement.”
Criticism of the SEC's Approach
Garlinghouse was sharply critical of the SEC's approach, describing it as an explicit display of “bad faith, nothing less.“ He holds that this unconstructive attitude was evident from the outset of the legal action against Ripple, which commenced in December 2020, sarcastically remarking that filing the lawsuit mere “days before Christmas“ felt like a “distinctly Scrooge-like maneuver.”
“This represents the epitome of prioritizing political maneuvering over individuals […] and favoring power accumulation over sound policy,” Garlinghouse argued.
Ripple's CEO Speaks Out
Garlinghouse clarified that he addressed “every question [the SEC] posed” before the lawsuit was lodged, and he was never given the impression that XRP was a security.
In his view, the SEC is “out to stifle” innovation and the crypto sector within the U.S., contending that the Hinman speech is not merely about “a single token or a particular blockchain,” but rather about the overarching attitude that the SEC has adopted towards the crypto industry.
“This is about highlighting how the SEC has persistently enforced punitive measures against crypto entities, while feigning a welcoming stance and urging compliance, all the while misrepresenting their alleged guidance.”
SEC Accusations and Possible Implications
Garlinghouse expanded, saying “at the very least,” the documents suggest that SEC high-ranking officials “couldn’t reach a consensus” on the law and warned Bill Hinman that his remarks would "further muddle the public's understanding of crypto rules.”
On June 13, Cointelegraph disclosed that notes within the disclosed documents implied the authors were anxious that Hinman's assertion that Ether is not a security could make it “hard for the agency to adopt a different stance on Ether down the line.”
However, Garlinghouse argued that “at worst,” the documents revealed that Hinman “purposely disregarded the law” and attempted to “formulate new laws.“
Garlinghouse underlined that the industry needs to stand united since the SEC may target additional crypto companies in the future.
“As our lawsuit reaches its conclusion, for numerous others it's just beginning, thus the quest for clarity must go on” he affirmed.
This follows the SEC’s lawsuit against the crypto exchange Binance on June 5 for allegedly offering unregistered securities. A day after, the regulatory body initiated similar proceedings against Coinbase.