Ripple CEO Brad Garlinghouse strongly criticized former United States Securities and Exchange Commission (SEC) Chair Jay Clayton’s remarks regarding the agency’s regulatory approach. Since the first quarter of 2023, the SEC has initiated various regulatory actions against crypto exchanges and companies.
During an interview with CNBC on June 29, 2023, Clayton expressed his view that the SEC should pursue legal action against specific companies only when they have strong legal grounds. He emphasized that regulatory agencies should introduce regulations and legal cases they believe will successfully withstand judicial scrutiny.
Watching this clip makes my blood boil.
(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
In light of the SEC voting to dismiss the allegations without prejudice, the Ripple CEO reminded that the former SEC chair had filed a lawsuit that had little chance of success in court. In the lawsuit against Ripple, Garlinghouse and Ripple co-founder Christian Larsen in December 2020, the SEC accused the company and the two executives of “unregistered, ongoing digital asset securities offering,” alleging that they had raised more than $1.3 billion from sales of the XRP (XRP) token.
“As a reminder, Jay Clayton brought the case against Ripple, me and Chris Larsen. And left the building the next day.”
Clayton’s statements from June 2023 have gained attention in light of the recent lawsuit developments involving Garlinghouse and Larsen. As previously reported, the SEC moved to dismiss the charges against the executives in October.
The SEC’s move follows Judge Analisa Torres’s ruling partially in favor of Ripple in July, declaring that retail sales of the XRP token did not meet the legal definition of a security. However, The court found that Ripple had violated securities laws by selling XRP tokens directly to institutional investors.