Ripple CEO Brad Garlinghouse has called out the U.S. Securities Exchange Commission (SEC) for its regulatory overreach over crypto, arguing that it is hurting retail investors and small enterprises.
In a bold and outspoken tweet on Sunday, Garlinghouse addressed the SEC’s handling of cryptocurrency regulations, calling for legislative clarity to protect retail investors and small enterprises from the repercussions of the SEC’s enforcement approach in the crypto space. Notably, Garlinghouse’s tweet raised crucial concerns about the SEC’s actions and their impact on the crypto community.
“An important topic has come up about protecting retail. The SEC created this mess by proclaiming it was the cop on the crypto beat when it had no legal jurisdiction. Where’s that gotten us? Consumers left holding the bag in bankruptcy court while the SEC holds press conferences.” He wrote.
He further highlighted the consequences faced by retail investors due to the SEC’s regulatory overreach in the cryptocurrency sector, emphasizing the need for legislative intervention to avoid confusion, resulting in retail investors being left vulnerable to the inherent risks of the crypto market.
“It’s absurd to blame a Judge for faithfully applying the law. We all know legislation – not more regulation by enforcement – is the only way forward to provide clear rules and protect retail,” he added.
According to him, this call for legislative clarity reflects the growing sentiment among industry leaders that regulatory frameworks must be established to protect investors and promote innovation without stifling growth. Garlinghouse also expressed appreciation for members of Congress who have been advocating for more comprehensive cryptocurrency legislation.
Garlinghouse’s comments come approximately a week after the court delivered a landmark decision in favor of Ripple, ruling that XRP is not a security. This ruling brought clarity to XRP’s status and underscored the need for a more robust and predictable regulatory framework to govern the crypto market.
Over the years, the SEC’s handling of cryptocurrency enforcement has drawn considerable criticism, primarily centred around its potential negative effects on innovation and investment within the industry. While President Biden’s administration has been slow to take decisive action on this matter, several lawmakers have proposed pro-cryptocurrency regulations. However, none of these proposals has been successfully passed yet. Concurrently, a growing chorus of voices has been calling for the removal of SEC chair Gary Gensler.
That said, even though the recent court ruling in favour of Ripple’s XRP may have provided some relief for the crypto sector, the overall regulatory landscape remains uncertain. Notably, the SEC has recently hinted at appealing the court’s judgement which it argues goes against “fundamental securities laws principles” such as the Howey test.
