Ripple CEO Says Former SEC Chair’s “Hypocrisy is Shocking”
Ripple CEO Brad Garlinghouse has lashed out against Jay Clayton, the former Chairman of the United States Securities and Exchange Commission (SEC) for showing hypocrisy when it comes to discussions around corporate litigation and the agency’s role.
Ripple CEO Recalls Lawsuit’s Initiator
Responding to a CNBC roundtable talk featuring Jay Clayton as shared by Gemini CEO, Cameron Winklevoss, the Ripple CEO recalled that the close to 3-year lawsuit Ripple battled was initiated by Clayton.
One major concern that appeared to anger Garlinghouse was the fact that Clayton left the SEC days after the Ripple lawsuit was filed. The CNBC interview saw Clayton criticizing current SEC Chairman Gary Gensler for abuse of power with respect to the agency’s mode of bringing enforcement actions against crypto firms.
Watching this clip makes my blood boil.
The hypocrisy is shocking. @CNBC @SquawkCNBC should be calling him out for the bullshit.
(As a reminder, jay clayton brought the case against ripple, me and Chris Larsen. And left the building the next day).
— Brad Garlinghouse (@bgarlinghouse) October 28, 2023
Since taking over the reins at the SEC, Gary Gensler has sued Kraken Exchange for its staking program earlier this year. The markets regulator scored a $30 million settlement with the trading platform agreeing to stop the offering. Besides Kraken, Coinbase Exchange and Binance have also come under the crosshairs of the regulator as the commission claims both platforms facilitated the trading of unregistered crypto securities.
Some of the securities alleged include Cardano (ADA), Solana (SOL), Filecoin (FIL), and Decentraland (MANA) amongst others.
Despite the high-profile cases under Gary Gensler’s SEC, Ripple Labs’ lawsuit as initiated by Clayton is considered the highest-profile legal brawl in the crypto ecosystem in the past few years. It was not until July that the payments firm snatched its first major win as Judge Analisa Torres declared that the programmatic sales of XRP do not constitute an investment contract.
The aspect of the lawsuit that entangled Garlinghouse and Ripple founder Chris Larsen was also dropped by the SEC this month.
Positive Precedent Set
The Ripple vs SEC lawsuit has formed a precedent for other related legal cases in the industry according to experts even though there is an institutional aspect of the case to settle in the coming weeks. The ruling from Judge Analisa Torres favored the SEC in that she claimed Ripple’s sales of XRP to institutional investors violates securities laws.
For this, the SEC is demanding a settlement and conversations around this is billed to start as from November 9. In all, with Coinbase and Binance cases still pending, expectation mounts that these firms can benefit from the ruling in the Ripple case.
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