Ripple CEO Discusses the Future of Crypto Regulation in the US
In a recent report by CNBC on October 24, Brad Garlinghouse, the CEO of Ripple Labs, expressed his belief that the United States is on the verge of becoming more accommodating towards cryptocurrencies, regardless of the political landscape after the upcoming elections.
Optimistic Outlook for Crypto Legislation
During his speech at DC Fintech Week, Garlinghouse stated:
“This is the most important election we’ve had, but I also believe no matter what happens, we’re going to have a more pro-crypto, more pro-innovation Congress than we’ve ever had.”
Despite his optimism, Garlinghouse advised emerging companies to consider establishing their operations outside the US, noting that around 95% of Ripple’s activities now occur internationally. This move reflects the ongoing struggles faced by the crypto sector with the US Securities and Exchange Commission (SEC).
Legal Challenges Facing Ripple
Ripple has been under intense scrutiny since December 2020 when the SEC filed a lawsuit asserting that the company had offered unregistered securities through its cryptocurrency, XRP. In a significant ruling from July 2023, the court determined that Ripple’s sales to institutional investors fell under the definition of investment contracts, thereby breaching securities laws. However, it also clarified that Ripple’s programmatic sales did not constitute securities offerings.
Currently, both the SEC and Ripple have submitted appeals regarding this judgment, indicating the ongoing nature of this legal dispute.
A Temporary Setback
Garlinghouse characterized the present uncertainty in the regulatory framework for crypto in the US as a “speed bump,” remarking that any skepticism about the industry’s growth is misplaced.
He remains hopeful for a political reset, believing that increasing acceptance of cryptocurrencies will emerge from both major parties.
Candidates and Crypto Stance
Although Garlinghouse has not officially endorsed any presidential candidates, he noted that former President Donald Trump has been vocally supportive of crypto initiatives. Meanwhile, Vice President Kamala Harris has maintained a more nuanced stance, which he finds encouraging:
“Trump came out early and aggressively in a pro-crypto way and said he’s the crypto president. Team Harris has been more nuanced, but they had some of the most constructive things they’ve said publicly this week.”
Additionally, Garlinghouse pointed out Harris’s Silicon Valley background, suggesting it reflects a greater affinity for technology, despite her relatively quiet position on crypto topics. He has also shown support for John Deaton, an attorney contesting Senator Elizabeth Warren, who has been critical of the cryptocurrency sector.
Call for a Political Reset
While Garlinghouse holds positive views about a potential Harris administration, he criticized the current Biden administration for fostering a challenging atmosphere for crypto enterprises. He pointed to various actions taken by the SEC and other regulatory bodies as detrimental.
“That is a hostile administration. No matter what happens in this next election, we will have a reset. We can debate the magnitude of that reset, and there’s lots of disagreement about that … We’re going to see forward progress, and I certainly am looking forward to that.”
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