Ex-SEC Chair Criticized: Expert Claims Damage to XRP, Ripple CEO Responds to Clayton’s Fresh Comment
Brad Garlinghouse expressed shock in response to comments by former SEC chair Jay Clay regarding the current state of crypto regulation.
Ripple CEO Brad Galringhouse has reacted to former SEC chair Jay Clayton’s opinion regarding the state of crypto regulation in the United States.
During a recent event hosted by the Council on Foreign Relations (CFR), Clayton expressed sympathy for crypto entrepreneurs facing difficulty raising capital.
“I’m very sympathetic to the entrepreneurs who wanted to reach out to the public to raise capital. And I’m very sympathetic to the retail investors who want those opportunities,” Clayton said.
The former SEC chair urged U.S. regulators to establish favorable crypto regulations that could make it easier for crypto entrepreneurs to raise capital. Per Clayton, the appropriate way to regulate cryptos is to first recognize that digital assets are not products but technology.
Furthermore, the ex-SEC boss pointed out that the debate of whether a crypto asset should be classified as a security or commodity is overblown.
“Most of those decisions [on whether a crypto is a security or commodity] are pretty easy,” he remarked.
Ripple CEO and Pro-XRP Lawyer React
As expected, Clayton’s remarks stirred reactions among crypto enthusiasts, including Garlinghouse. Reacting, the Ripple CEO noted that he was “in disbelief” after listening to Clayton’s new opinion regarding crypto regulation.
I’m in disbelief
— Brad Garlinghouse (@bgarlinghouse) November 26, 2023
Aside from Garlinghouse, pro-XRP lawyer Bill Morgan also reacted to Clayton’s recent comment. According to Attorney Morgan, Clayton only cared about securities debate when he wanted to “damage” XRP’s chances of competing against Bitcoin (BTC) and Ethereum (ETH).
Attorney Morgan accused Clayton of picking winners in the crypto space via his involvement in William Hinman’s 2018 controversial “Ethereum free pass speech.”
It only mattered to him when he wanted to damage #XRP as a competitor to Ethereum and Bitcoin. And he has the gall to say let the market decide the value of technology after he was involved in the Ethereum free pass speech that went a long way to the SEC picking a winner not the… https://t.co/z10F0Jit0K
— bill morgan (@Belisarius2020) November 26, 2023
Hinman Speech Left Ripple in Purgatory
It is worth mentioning that Clayton was in charge of the SEC when Hinman gave the infamous speech declaring Ethereum and Bitcoin as non-securities.
Following Hinman’s controversial speech, Garlinghouse and Ripple CTO David Schwartz visited the SEC to get clarity for XRP. During the visit, Garlinghouse conveyed that “Ripple is living in purgatory” due to Hinman’s speech.
At the time, neither Clayton nor Hinman explicitly categorized XRP as a security. However, the SEC, under Clayton’s leadership, charged Ripple with selling XRP as an unregistered security.
The SEC sued Ripple on December 22, 2020, Clayton’s last day in office. Interestingly, Ripple secured a partial victory, as the court ruled that most transactions the SEC alleges to be securities are not.
The court also ruled that XRP in itself is not a security, as alleged by the regulator. The lawsuit, which has lingered for nearly three years, is approaching its end. Notably, the case has entered the remedies phase, which will determine the appropriate penalty Ripple may face for violating the law via its institutional sales of XRP.
It remains to be seen whether the SEC will appeal the summary judgment decision after the remedies proceeding.