Brad Garlinghouse, Ripple CEO, criticizes former SEC chair Jay Clayton’s remark about the current regulatory approach against crypto projects.
Ripple CEO Brad Garlinghouse has reacted to an interview with former SEC Chair Jay Clayton regarding the commission’s regulatory approach.
Clayton Criticizes SEC Enforcement Actions
In a CNBC interview dated June 28, 2023, Clayton voiced his concerns about the SEC’s current regulatory tactics, especially its enforcement actions against crypto-related companies.
The former SEC chair advised leaders of the regulatory agency to take enforcement actions against crypto firms only when they believe the case has reasonable legal grounds.
The video, which was initially shared by Gemini’s co-founder Cameron Winklevoss, has been stirring lots of reactions from crypto enthusiasts. However, Garlinghouse reacted to the video a week after the SEC dropped its charges against him and Ripple co-founder Chris Larsen.
Ripple CEO Reacts
Reacting, Garlinghouse recounted how Clayton charged Ripple and its executives with violating securities laws and subsequently left the agency the next day.
The Ripple CEO disclosed that he was infuriated with Clayton’s interview, emphasizing that the former SEC chair’s hypocrisy is shocking. Furthermore, Garlinghouse characterized Clayton’s remark as “bulls**t.”
Watching this clip makes my blood boil.
The hypocrisy is shocking. @CNBC @SquawkCNBC should be calling him out for the bullshit.
(As a reminder, jay clayton brought the case against ripple, me and Chris Larsen. And left the building the next day).
— Brad Garlinghouse (@bgarlinghouse) October 28, 2023
SEC v. Ripple Lawsuit
On December 22, 2020, the SEC, under the leadership of Clayton, charged Ripple with violating securities laws. The regulator also sued Garlinghouse and Larsen, alleging that the duo aided and abetted Ripple in distributing XRP as an unregistered security to investors.
After more than two years of intense legal battle, a New York federal court ruled that Ripple only violated the law by selling XRP to institutional investors. However, the court found Ripple’s programmatic sale of XRP and other distributions non-securities.
The court scheduled the commission’s case against Garlinghouse and Larsen for a trial by next year. Interestingly, the SEC dropped the charges without prejudice.
2 Reasons Why SEC Dropped Charges Against Ripple Execs
The move, which came as a shock to many, sparked a series of speculations within the crypto community. Many analysts speculated that the regulator dropped the charges due to the case’s complexity.
In a recent tweet, Crypto-Law founder John Deaton highlighted two reasons the SEC dropped the case. Attorney Deaton pointed out that the SEC dropped the case because it did not stand a chance of winning. He also noted that the list of witnesses that could testify during the trial deposition also prompted the regulator to dismiss the case.
If the scheduled trial had taken place as expected, both Clayton and former SEC director William Hinman could be subpoenaed to take the stand.
While Deaton believes Hinman would testify at the proceeding, he opined that Ripple does not stand a chance to summon a former SEC chair for a trial.
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