The U.S. Securities and Exchange Commission (SEC) prioritizes “politics and power” over creating “sound policies,” Ripple CEO Brad Garlinghouse said in a July 15 interview with Bloomberg.
Garglinghouse reiterated his criticism of the regulatory watchdog, saying that instead of providing clear rules for crypto, the SEC has sown confusion in the market. He noted:
“…she [SEC] knew there was confusion and they did things that they knew would add to the confusion and the only reason to do that is because this confusion actually masquerades as power for the SEC”
The ruling in the Ripple case, which ruled that XRP is not a security in and of itself, has cleared up some of the confusion sown by the SEC, he said. The ruling provided much-needed clarity to the entire US market and is therefore “a win for the entire crypto industry as well,” he said.
Garglinghouse further stated that the Ripple decision has shortened the “overreach” of SEC Chairman Gary Gensler, who claims that most cryptocurrencies are securities. He added:
“Ironically, no other country in the world thought of XRP as a security, but it is nice to now have that clarity for the market here in the United States.”
Ripple took on a ‘bully’
Garlinghouse stressed the importance of the Ripple ruling, saying this is the “first time the SEC has lost a crypto case.” In fact, he said the SEC has gone largely unchallenged because the regulator has targeted smaller companies.
“I think the SEC has been a bully and they went after weak players who couldn’t put up a good defense.”
As a crypto giant, Ripple had the “fortitude” and “courage” to take on the SEC, Garlinghouse said. The crypto industry “needed someone to fight” because the SEC has used regulation through enforcement as its main tool, which is “not a good way to build a market,” he noted.
According to Garlinghouse, the SEC is not doing the hard work that other countries in Europe and elsewhere have done to provide clear crypto regulations. Regulatory clarity could help investors and entrepreneurs, he noted, adding that:
“…even now, the SEC is more focused on filing lawsuits than doing the work.”
SEC appeals could take years
According to some experts, such as John Reed Stark, former chief of internet enforcement at the SEC, the Ripple ruling is “ripe for appeal” and likely to be overturned. However, Garlinghouse said it could take the SEC years to appeal.
In addition, Garlinghouse is “very optimistic” that even if the SEC appeals in Second Circuit court, Ripple will win and strengthen the recent verdict. His optimism is based on the fact that the SEC has overstepped its authority by claiming that most cryptocurrencies are securities.