“SEC Has Lost Sight of Its Mission to Protect Investors” Ripple CEO Says

By Aaron Feuerstein November 13, 2023 In Ripple, SEC
Source: Adobe Stock
  • Ripple CEO Brad Garlinghouse, in a CNBC interview post the Ripple Swell event, expressed his opinion about the efficiency of the United States Securities and Exchange Commission (SEC) as a regulator.
  • He spoke about the three consecutive legal victories against the SEC, including a ruling confirming XRP is not a security.
  • Ripple’s CEO criticised the SEC’s focus, welcomed court decision on remedies, and sees potential industry benefits from the legal developments.

Ripple Scores Against SEC

Brad Garlinghouse, Ripple’s CEO, stated that Ripple has achieved three successive legal wins against the SEC. Firstly, a July 13th ruling clearly stated that XRP is not a security. Secondly, the court rejected the SEC’s request for an interlocutory appeal. Thirdly, the court dismissed, with prejudice, the allegations against Chris Larsen and himself. Garlinghouse remarked on the repetitiveness of the SEC’s actions, likening it to the proverbial definition of insanity, which is doing the same thing repeatedly and expecting different results. He implied that the SEC persists in this manner despite their continuous failures in these legal battles.

SEC Is Being Arbitrary and Capricious

Referring to the SEC and the Bitcoin ETF, Garlinghouse pointed out some pretty choice words by the judge.

A federal judge talking about a federal agency saying the SEC is being arbitrary and capricious. Generally, judges tend to be pretty down the middle and try to not be dramatic, those are damning words. So, I think at some point the SEC has to step back and realise that their approach of regulation through enforcement, that has to break.

Brad Garlinghouse, Ripple CEO

Next Steps for Ripple

Regarding the SEC seeking around US$ 770 million (AU$ 1.2 billion) in disgorgement from Ripple, Garlinghouse humorously referred to speculating on the potential outcomes, like betting odds in Vegas. The CEO criticised the SEC for losing sight of their mission to protect investors, questioning who the agency is actually safeguarding in this case.

I think the SEC in my opinion has lost sight of their mission to protect investors and the question is who are they protecting in this journey.

Brad Garlinghouse, Ripple CEO

He indicated that the court will decide on the appropriate remedies, a decision which Ripple welcomes. He highlighted the need to consider investor harm and the applicability of securities laws, including exemptions for certain types of investors. Garlinghouse sees this situation as beneficial not just for Ripple but for the entire industry, viewing the SEC’s recent legal setbacks as a check on their power in the U.S.

Finally, the Ripple CEO expressed optimism that this case could mark the beginning of a more favourable environment for the growth of the blockchain industry in the U.S., the world’s largest economy.

Aaron Feuerstein

Aaron Feuerstein

Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.

You may also like