• Ripple CEO Brad Garlinghouse calls out the SEC for weaponizing a lack of regulatory clarity in crypto markets against industry firms.
• He comments on the reveal of internal emails from former SEC official William Hinman, who stated that Bitcoin and Ethereum are not securities.
• The SEC has sued Ripple alleging that XRP was sold as an unregistered security, which Garlinghouse expects to conclude soon.
SEC Chair Gary Gensler Weaponizing Lack of Regulatory Clarity
Ripple CEO Brad Garlinghouse is accusing United States Securities and Exchange Commission (SEC) chair Gary Gensler of weaponizing a lack of regulatory clarity in the cryptocurrency industry against businesses operating within it.
Ripple CEO Calls Out SEC
Garlinghouse made his assertion in a video statement posted on Twitter after the release of internal emails related to a 2018 speech delivered by former SEC official William Hinman. In his capacity as director of the division of corporate finance at the time, Hinman declared that he did not believe either Bitcoin (BTC) or Ethereum (ETH) constituted securities.
SEC Lawsuit Against Ripple
In late 2020, the SEC filed suit against Ripple Labs Inc., alleging that its native token XRP had been sold unlawfully as an unregistered security. Garlinghouse recently predicted that this case would be resolved sooner rather than later.
Internal Emails Show Lack Of Clarity From The SEC
Garlinghouse argues that these newly-released emails show either there is no agreement amongst senior officials at the SEC regarding how to determine if a given token is a security, or more disturbingly, Hinman deliberately ignored existing laws when making his statement two years ago. He further noted that this case does not focus solely on one token or blockchain technology but rather points to how extensive enforcement action has been taken against cryptocurrency players while purportedly welcoming them with open arms and encouraging them to register with regulators.
Hinman’s Speech Creates New Factors To Determine Security Status
According to Garlinghouse, Hinman’s speech created new factors for determining whether or not an asset is sufficiently decentralized so as to no longer be considered a security under US law – something only Congress can do – while receiving millions in payments from his law firm at the same time; payments which were part of an alliance involving parties who had vested interests in said speech being made by him while still employed as a public servant by the regulator itself.