Ripple CEO Brad Garlinghouse has criticized the role that the U.S. Securities and Exchange Commission (SEC) decided to assume against the cryptocurrency industry. After the release of the Hinman docs, which explain the internal discussions of the institution before the now famous Hinman speech, Garlinghouse stated that the SEC “weaponized the lack of regulatory clarity,” throwing an entire industry into chaos.
Ripple CEO Brad Garlinghouse Accuses SEC of Overreach
Ripple CEO Brad Garlinghouse has reacted to the recent release of a set of documents that show the internal debates of the U.S. Securities and Exchange Commission (SEC) previous to a 2018 speech from its Director of the Division of Corporation Finance William Hinman.
Commonly referred to as the Hinman docs, these show the internal differences and the confusion the agency had to deal with in qualifying some tokens and cryptocurrencies as securities. According to Ripple CLO Stuart Alderoty, Hinman ignored some of the offered advice and pushed a speech that “was divorced from the Howey factors, exposed regulatory gaps, and would create not just confusion, but ‘greater confusion’ in the market.”
Garlinghouse stated it was “unconscionable that a regulator – when presented with so much pushback on what he was about to say / how he compiled this fake ‘test’ in the first place – decided to move forward anyway, and throw an entire industry into chaos.”
Furthermore, Garlinghouse accused the SEC of weaponizing “the lack of regulatory clarity through enforcement actions” after this speech, qualifying the SEC lawsuit against Ripple and himself as a “deplorable, politically-motivated overreach.”
Garlinghouse has railed against the actions of the SEC before, stating that the institution was using the recent legal actions against Coinbase and Binance as a distraction “from the agency’s FTX debacle.”
Ripple and the SEC have been battling in court since December 2020, when the institution slapped the company, Garlinghouse, and co-founder Christian Larsen with a $1.3 billion lawsuit on an unregistered digital asset securities offering.
Garlinghouse estimates that the company will have spent $200 million on its defense by the time the lawsuit is over. However, the executive claims this case is of “pivotal” importance for the whole crypto industry, as he believes that more enforcement actions will be carried out if the SEC position prevails.
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