With a market capitalization of over $2 trillion, cryptocurrency has become a global phenomenon that draws buyers and fans from all over the globe. However, regulation ambiguity and uneven government and financial watchdog policies have made it difficult for the sector to prosper.
Since December 2020, Ripple, a significant cryptocurrency market figure, has been involved in judicial conflict with the US Securities and Exchange Commission (SEC). Brad Garlinghouse, CEO of Ripple, recently discussed the regulatory climate and how it has prompted the sector to look for friendlier settings abroad.
So, what is the Ripple CEO’s view on the global hype of crypto, and how does the SEC support it?
Ripple CEO on Crypto
Since December 2020, the SEC has been investigating Ripple’s XRP coin, alleging that the firm raised $1.3 billion through an unauthorized securities offering. The accusations have been refuted by Ripple, which maintains that XRP is money and not an asset. Since many projects are concerned about their regulatory standing and the effects of the SEC’s actions on the more significant industry, the court dispute has significantly increased uncertainty in the cryptocurrency sector.
In a recent interview with Bloomberg, Brad Garlinghouse, CEO of Ripple, stated that the US Securities and Exchange Commission’s strenuous control of cryptocurrency risked crippling the fledgling sector as it expanded.
The CEO of Coinbase, one of the biggest crypto platforms in the US, previously stated that crypto players have “already begun relocating outside” of the country in bulk to escape the regulation sledgehammer of the SEC.
Brian Armstrong, President of Coinbase, made this statement after the FTX crash in November 2022: “The problem is that the SEC failed to create regulatory clarity here in the US, so many American investors (and 95% of trading activity) went offshore,”
Located in San Francisco, the future of the entire cryptocurrency industry and whether many cryptocurrencies will be classified as securities or commodities will be decided by a landmark court case that Ripple is presently embroiled in. Click here to find out what DeFi experts at Bitcoineer suggest.
The SEC filed a lawsuit against Ripple and its top officials in 2020 for marketing Ripple (also known as XRP), the sixth-largest cryptocurrency in the world, as an unregistered asset. The current market value of Ripple’s coin is about $19 billion. Although Ripple attempted to have the case dismissed and forego a trial by pointing out that Ripple assists in facilitating cross-border transfers, the case is still in the courts, and a ruling is expected this year.
However, as the legal drama plays out, Ripple’s top executive has been fearless in sharing his thoughts on the market’s direction and how the cryptocurrency sector will perform if the SEC successfully classifies cryptocurrencies as stocks.
First, Garlinghouse cautions that if the SEC effectively sues Ripple, the industry is prepared for a barrage of litigation. Garlinghouse remarked that there were better ways to regulate the crypto industry.
As for Ripple’s future, the coin is currently still growing. “Ripple remains one of the few crypto firms well-capitalized and ready to meet robust customer demand in 2023,” the business said. Ripple even bragged about $226 million in cryptocurrency transactions in its most recent quarterly report.
However, according to Garlinghouse, the United States is at a turning point where it may need help to host the ensuing surge of blockchain and cryptocurrency inventions. Instead, it faces a “danger” of being surpassed by foreign nations who do not stifle the industry with legislation and enforcement. He claimed that the few nations with “clear norms of the road”—including Australia, the UK, Japan, Singapore, and Switzerland—were prepared to participate in crypto companies’ migration.
Many Side with Garlinghouse
The timing of Garlinghouse’s remarks coincides with a rising level of anxiety among crypto companies regarding the US legislative landscape. While federal regulators have been slow to provide clear guidelines on how cryptocurrencies and similar activities should be handled under current securities laws, several states have enacted laws or proposed bills to regulate the sector.
Many in the sector contend that cryptocurrency must have a more uniform and predictable legislative structure to realize its maximum potential. Some have urged lawmakers to enact legislation that would give the sector more clarification and legal security. In contrast, others have suggested that creating a new regulatory body, especially for cryptocurrencies, might be necessary.
The crypto industry continues to expand and change despite the difficulties caused by the SEC’s actions, with new initiatives and developments appearing daily. Regulatory frameworks will probably continue to develop and adjust as the sector matures and becomes more widely accepted to keep up with the shifting environment. As indicated by Ripple’s Garlinghouse, many businesses may continue to look for more hospitable regulatory settings abroad shortly. The months coming will indicate the response to Ripple’s view.
Byline: Hannah Parker
