Ripple CEO Brad Garlinghouse has voiced strong criticism of former U.S. Securities and Exchange Commission (SEC) Chair Jay Clayton’s recent statements concerning the agency’s regulatory approach.
The SEC has been actively pursuing regulatory actions against crypto exchanges and companies since the beginning of 2023.
In an interview with CNBC on June 29, 2023, Jay Clayton expressed his belief that the SEC should only take legal action against specific companies when there are solid legal grounds to do so.
He emphasized the importance of regulatory agencies introducing regulations and pursuing legal cases that they are confident will successfully withstand judicial scrutiny.
Brad Garlinghouse seized the opportunity to remind everyone that it was Jay Clayton who had initiated a lawsuit against Ripple, himself, and Ripple co-founder Christian Larsen in December 2020.
The SEC’s lawsuit alleged that the company and its two executives had engaged in an “unregistered, ongoing digital asset securities offering,” having raised over $1.3 billion through the sale of XRP tokens.
Garlinghouse pointed out that Clayton had brought the case against them and then abruptly left his position the very next day.
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Clayton’s remarks from June 2023 have drawn significant attention, especially in light of the recent developments in the lawsuit involving Garlinghouse and Larsen.
As previously reported, the SEC made a move to dismiss the charges against the two executives in October.
This decision by the SEC follows a significant ruling by Judge Analisa Torres in July.
The ruling partially favored Ripple, declaring that the retail sales of XRP tokens did not meet the legal definition of a security.
However, the court did find Ripple in violation of securities laws for directly selling XRP tokens to institutional investors.
In essence, Garlinghouse’s criticism underscores the ongoing tension between crypto companies and regulatory bodies like the SEC.
The case against Ripple has been a focal point of this tension, with key figures like Clayton at the center of the controversy.
As the crypto industry continues to evolve, these regulatory challenges will likely remain a subject of intense debate and legal scrutiny.
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