Ripple CEO Brad Garlinghouse fired shots in his recent video against the ‘overreach’ of the US Securities and Exchange Commission (SEC) and its chairman Gary Gensler. Garlinghouse cited a set of emails and documents that represent the internal debates of the SEC on the crypto industry regulatory framework before the 2018 William Hinman speech.
Garlinghouse took to Twitter to disclose that there was a lack of consensus within the SEC regarding the point at which a token ceases to be considered a security. He tweeted:
Trying something new – some thoughts from me on the events (specifically the release of the Hinman documents) of this week. For me, this has all had a personal bent to it – and felt like it warranted some personal comments. pic.twitter.com/k4dYeQGhsN
— Brad Garlinghouse (@bgarlinghouse) June 16, 2023
The crypto entrepreneur revealed that members within the agency had directly expressed their concerns to the then Director of the Division of Corporation Finance William Hinman, stating that his speech would only serve to further confuse the general public. During his 2018 speech, Hinman officially declared his positive approach towards the SEC’s decision to not consider the cryptocurrencies Bitcoin (BTC) and Ether (ETH) as securities.
The Ripple CEO Garlinghouse leveled accusations against the SEC, claiming that they were purposefully leveraging the absence of clear regulations by employing enforcement actions. Garlinghouse categorized the lawsuit filed by the SEC against Ripple as a politically motivated overreach.
Additionally, Garlinghouse highlighted a concerning detail revealed by the documents. During Hinman’s tenure at the SEC, he received financial payments from his law firm, which had connections to other parties with vested interests in the content of his speech.
Garlinghouse commented on the SEC’s crypto regulation stance by asserting,
Unconscionable that a regulator – when presented with so much pushback on what he was about to say / how he compiled this fake ‘test’ in the first place – decided to move forward anyway, and throw an entire industry into chaos.
Garlinghouse underscored the fact that the SEC had been unable to provide any substantial evidence to support the allegations levied against Ripple. Since December 2020, Ripple and the SEC have been engaged in a legal battle, which originated from the SEC’s filing of a $1.3 billion lawsuit against the company, Garlinghouse, and co-founder Christian Larsen.
The lawsuit pertained to allegations of conducting an unregistered digital asset securities offering. Recently, the Ripple CEO and Legal Officer Charles Gasparino discussed SEC’s approach to crypto where Gasparino highlighted the need for Congress to step in and set clear digital currency ground rules.
