Brad Garlinghouse, the CEO of Ripple, made key revelations regarding the U.S. Securities and Exchange Commission (SEC) in a rare video address, providing light on what he believes to be a purposeful effort to stifle innovation in the crypto space and control through enforcement. The documents associated with the notorious 2018 Hinman speech, which covered the standards for establishing if a token is a security, were recently unsealed, prompting the Chief Executive to make his remarks.
Highlighting the contents of the unsealed documents, Garlinghouse stated, “At best, these documents show that senior officials at the SEC couldn’t agree on the law and told Bill Hinman directly he would confuse the public even more about the rules for crypto. At worst, they show that Hinman deliberately ignored the law and tried to create new laws, something only Congress can do.”
Garlinghouse further emphasized that while the SEC put on a front of openness and direction, the findings were not limited to any token or blockchain and instead served as proof of the agency’s tenacious pursuit of enforcement actions against the sector. He mentioned Ripple’s aggressive interaction with the SEC, including private meetings with Jay Clayton and Bill Hinman, during which no objections to the token XRP being categorized as a security were voiced.
“We were fully transparent, not knowing they would then use this information against us,” Ripple’s CEO said in the Video message. He criticized the unexpected SEC Wells notification, citing violations of the Securities and Exchange Act without offering details and reiterating the experiences of others who had faced similar legal procedures.
Garlinghouse alleged that the SEC tried discouraging American crypto innovation by pointing out the regulatory body’s purported contradictions and ambiguities. He called out the current SEC chair as an unelected bureaucrat. He accused the SEC of utilizing the lack of regulatory clarity to seize control of the whole cryptocurrency industry.
“The SEC tried to bully us into acquiescing,” Garlinghouse stated. “Thankfully we have had the resources to fight back, and now we can all see what they’ve fought so hard to hide. They knowingly created confusion about the rules and used that confusion to regulate through enforcement. That’s bad faith, plain and simple.”
The Ripple CEO noted that there is still much to be done in the struggle for regulatory clarity as the SEC’s action against Ripple approaches its conclusion. He expressed his gratitude to those who supported Ripple throughout the process, including his co-workers, friends, family, and the larger XRP community.
The SEC’s approach to cryptocurrency has been the subject of increased debate since Garlinghouse’s discoveries, which have also called into question the agency’s transparency and regulatory aims. The need for transparent legislation and an environment that fosters innovation is still at the forefront of the continuing discussion as the crypto community waits for new developments.
