Ripple CEO Brad Garlinghouse answered questions about the lawsuit filed by the U.S. Securities and Exchange Commission (SEC). He stressed that the company will not give up trying to settle contradictions with the new leadership of the department out of court.
Q: Why didn’t Ripple settle with the SEC?
Can’t get into specifics, but know we tried – and will continue to try w/ the new administration – to resolve this in a way so the XRP community can continue innovating, consumers are protected and orderly markets are preserved. 2/10
— Brad Garlinghouse (@bgarlinghouse) January 7, 2021
When asked if Ripple paid exchanges to list XRP, Garlinghouse stated that 95% of the tokens are traded outside the US and the company has no influence on the listing or the owners of exchanges.
Q: Did you pay exchanges to list XRP? When will it be relisted?
XRP is one of the most liquid (top 3-5) digital assets globally, and 95% is traded outside the US. Ripple has no control over where XRP is listed, who owns it, etc. It’s open-source and decentralized. 3/10
— Brad Garlinghouse (@bgarlinghouse) January 7, 2021
He also pointed to the fact that the American exchanges are not delisting XRP rather suspending XRP trading due to regulations risks. “It’s not just a lack of regulatory certainty in the U.S. right now, it’s regulatory chaos.”
We’ve moved from lack of regulatory clarity to regulatory chaos in the U.S. This is why regulation by enforcement is such bad public policy. With the new administration, we expect #DCEA to be reintroduced – common-sense legislation providing clarity to the entire industry. 5/10
— Brad Garlinghouse (@bgarlinghouse) January 7, 2021
The company will soon file an official response to the lawsuit. According to him, Ripple holders are fully confident in the position of Ripple, and Tetragon, which demanded the immediate repayment of their XRP holdings, took unfair advantage of the situation.
Q: Do investors have faith in Ripple?
Yes, we have real shareholders. That is how you own Ripple equity – buying our stock, not buying XRP. We’re disappointed that Tetragon (who owns 1.5% of Ripple) is seeking to unfairly advantage itself through the SEC’s allegations. 7/10
— Brad Garlinghouse (@bgarlinghouse) January 7, 2021
Garlinghouse acknowledged that Ripple subsidized early customers of the XRP-based payment network (On-Demand Liquidity, ODL).
Q: Did you pay customers to use XRP?
We have provided some customers, especially first movers, w/ incentives to use ODL – this is building a payments network 101 (and totally lawful). Every payments network (PayPal, Visa, MC, etc) has or still uses incentives. 8/10
— Brad Garlinghouse (@bgarlinghouse) January 7, 2021
Recall that the SEC accused Ripple of selling unregistered securities for $1.3 billion over seven years. Preliminary hearings will be held on February 22, 2021.
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