The crypto world is full of interesting stories that have shaped the entire market; among them is the recent controversy garnered from the Ripple Labs lawsuit and XRP victory over the Securities Exchange Commission (SEC). The lawsuit was based on questions raised on XRP’s classification as a security.
A recent interview concerning the lawsuit revealed criticisms raised by the Ripple Labs CEO, Brad Garlinghouse, on the SEC’s former chair, Jay Clayton. Following his commentary, Gallinghouse critics sparked a buzz in the crypto world as he explained the need for accurate information research and pining successful trials.
Ripple Labs’s CEO critics
Since the beginning of the year, following the collapse of FTX, the US Securities and Exchanges Commission (SEC) has had a keen and strict approach to crypto regulation and raised legal battles with several exchanges.
Ripple Labs CEO has something to say about this after his win on the legal case placed against him and his company. Brad Garlinghouse, Ripple’s CEO, strongly criticized Jay Clayton’s remarks, the former SEC chair, on his approach to digital currency regulation.
Based on an interview with CNBC in the middle of the second quarter this year, Clayton shared his view on the SEC’s pursuit of legal action against various crypto companies. His comment specified that the regulatory authority should only seek out these companies if they have strong legal grounds.
According to him, he believes the SEC should go through with cases that are sure to be successful if presented in court and trials that can withstand judicial scrutiny.
Brad replied to this in a shocking critique, stating his feelings on the matter. In his X commentary on Clayton’s CNBC interview, he stated, “The hypocrisy is shocking.”
Following the SEC’s vote of dismissal to the Ripple Labs allegations without prejudice, Garlinghouse was clear to remind Clayton of the lawsuit filed against him and Ripple, which also had little chance of success in court.
The Securities and Exchange Commission accused the Ripple CEO and his co-founder, Christian Larsen, in December 2020. The filing was on selling unregistered digital securities offering that raised more than $1.3 billion from XRP sales.
Response to Clayton’s interview on CNBC
Garlinghouse shared his thoughts, saying, “As a reminder, Jay Clayton brought the case against Ripple, me and Chris Larsen. And left the building the next day.”
Since June, Clayton’s arguments in his interview have gained lots of attention in the crypto community in the case developments as Ripple Labs won the case. Charges against the Securities were dropped. Additionally, the charges were brought on right before the end of Clayton’s tenure as the Chair of SEC. This was before the expected June 2021 expiration date.
Judge Analisa Torres ruled in favor of Ripples in July 2023, exonerating both executives. This was based on the findings that XRP sales to secondary markets and individual buyers do not count as investment contracts.
Garlinghouse expressed his views and criticism even after his initial response. He has also taken to various platforms and expressed his thoughts on disappointment with the SEC. Among his arguments were the lack of regulatory clarity, double standards, and the impact of the lawsuit on the XRP holders. He also commented on Clayton’s Role in the decision to file the lawsuit before leaving the office.
Garlinghouse also suggested that the legal battle might have been fostered by a personal move or politically motivated strategy that did not match his arguments in his CNBC interview. Garlinghouse’s comments resonated well with the crypto community as experts accused the impact of the US’s regulatory environment on digital currencies.