Ripple CEO Brad Garlinghouse expressed his astonishment in response to former Securities and Exchange Commission (SEC) Chair Jay Clayton’s recent statements. The moment was captured in a video shared by prominent XRP influencer Crypto Eri, featuring Clayton’s live stream on November 21, 2023, for an interview with the Council on Foreign Relations, an American think tank.
Here’s Why Ripple CEO Garlinghouse Is In Disbelief
During the interview, Clayton made several comments that seemed at odds with his previous regulatory stance, particularly regarding the challenges faced by entrepreneurs and investors in the cryptocurrency space. He stated, “I am very sympathetic, very sympathetic with the entrepreneurs, the ones that reach out to the public to raise capital. And I am very sympathetic to the retail investors who want those opportunities.” This empathetic tone marks a significant shift from his actions as SEC Chair, especially considering his last-minute lawsuit against Ripple in December 2020.
He further remarked, “A lot of what you saw in the ICO craze, seen from crypto people is great frustration at that state of affairs,” adding that regulators should make make it easier to raise capital for small and medium size companies, “and making it easier for non-accredited investors or even credited investors to participate in those opportunities.”
Clayton’s view on the regulatory landscape of cryptocurrencies further amplified the surprise. He suggested that the technology behind cryptocurrencies should guide their regulatory treatment, saying, “I think the appropriate way to regulate crypto is to recognize it is technology, not a product. It’s a different technology for almost all cases, delivering a product that we already know, sometimes in a more efficient way.”
Addressing the often-debated classification of cryptocurrencies as either securities or commodities, Clayton’s remarks were particularly striking. He noted, “I think the market can decide. I think there is enough ethics in trading, but in terms of regulating crypto, I have sort of been – it’s a technology, I think there is a classification issue whether a product is a security or a commodity is overblown.”
Classification Of Crypto Is “Pretty Easy”
This perspective starkly contrasts with the SEC’s aggressive stance under his leadership, especially highlighted by the lawsuit against Ripple, which accused the firm of conducting an unregistered securities offering by selling XRP. He also added, “I think most of these decisions are pretty easy to the extent that we are going to wrestle with those classification issues. I say, get on with it, let’s have regulated platforms where you can put either, waiting until these classification issues get decided.”
Ripple CEO Garlinghouse, in response to Clayton’s comments, echoed the sentiments of disbelief prevalent in the XRP community. His reaction, simply stating, “I’m in disbelief,” encapsulates the irony and frustration felt by many who have been closely following the SEC’s actions in the crypto space, and especially against Ripple and XRP.
The lawsuit initiated by Clayton against Ripple just before his departure from the SEC had a significant impact on XRP, causing a massive sell-off. This action has been criticized for its timing and perceived conflict of interest, raising questions about the ethics behind such regulatory decisions. The XRP community, in particular, has been vocal in their accusations of hypocrisy against Clayton, condemning his actions while suing Ripple and then later seemingly advocating for a more understanding and technology-focused approach to regulation.
At press time, XRP traded at $0.6084.
Featured image from Pressroom – Warner Bros. Discovery, chart from TradingView.com