Brad Garlinghouse Warns Of ‘Crypto Industry Doom’ If Ripple’s Verdict Goes In SEC’s Favor

Lawsuit Dispute Pending Between SEC and Ripple

The Securities & Exchange Commission (SEC) of the US lodged a lawsuit a couple of years ago against Ripple i.e. issuer of XRP.

XRP is one of the widely renowned and ‘in-use’ cryptocurrencies of the world whose status was brought under challenge by the SEC.

The said dispute between Ripple and SEC predated the appointment of Gary Gensler as SEC’s Chairman. However, even Chairman Gensler is also of the view that ‘XRP’s’ status as ‘cryptocurrency’ is questionable.

On the contrary, Ripple’s claim is that XRP is based on a similar whitepaper as that of Bitcoin. If ‘Bitcoin’ is a cryptocurrency, then ‘XRP’ also is a cryptocurrency and not ‘security’, claims Ripple and its CEO, Brad Garlinghouse.

The final Verdict in the Lawsuit Is Expected Soon

The case has now moved into a phase where a final verdict is expected soon. Until the latest statement of Ripple’s CEO, Garlinghouse was confident that the final verdict would come against SEC and in favor of Ripple.

However, Garlinghouse’s latest statement suggests otherwise. He said in his statement that he was concerned about the fate of the crypto industry.

He stated that if the final verdicts come in favor of SEC then the entire crypto industry would be ‘doomed’

Garlinghouse explained that the lawsuit is of such a nature that the foundation of the crypto industry rests on it.

Garlinghouse’s Warning

He claimed that SEC is playing ‘good cop’ and ‘bad cop’ and hence the verdict of the lawsuit is of paramount importance.

Garlinghouse warned that if SEC succeeds in its claim, then the regulator would be going after others as hard as it can.

He referred to the SEC’s enforcement action against the worldwide renowned platform, Kraken wherein Kraken was forced to suspend staking.

He criticized SEC for misusing its authority for passing directives that are beyond SEC’s scope and ambit.

He further accused SEC of targeting crypto firms such as Paxos and penalizing them for offering Binance-backed stablecoin (BUSD).

Unwarranted Practices Exercised by SEC

The CEO of Ripple also took serious note of the unwarranted practices exercised by SEC in the recent times.

He accused SEC of exercising powers in which unnecessary enforcement actions had been initiated by the SEC against a number of crypto platforms.

He claimed that ‘such exercise of power by SEC is ‘unhealthy’ and against the interests of the crypto industry.

Garlinghouse commented that SEC is not performing its responsibility and, instead of regulating, is bent upon taking enforcement actions by initiating roving inquiries.

He referred to regulators of other countries to argue that they are performing duties strictly in accordance with their scope and ambit.

He stated that worldwide regulators are facilitating the crypto industry while the US regulator is going after the industry.

According to Garlinhouse, worldwide regulators are currently busy laying down crypto industry codes.

Furthermore, worldwide regulators are allowing the industry to expand in a supervised environment by encouraging best business practices, claimed Garlinghouse.

He then said that ‘SEC could ask global regulators to share notes with SEC and learn how to supervise the crypto industry’.

He explained further that in terms of dealing with the crypto industry, SEC is lagging behind the rest of the world.

Industry Migration

Garlinghouse also warned that the crypto industry is rapidly migrating from the US into crypto-friendly states.

He suggested that some crypto firms have already migrated from the US to countries such as Japan, Switzerland, the UK, Singapore, etc.

He further warned that ‘another lot of US-based crypto firms are in the process of re-settling outside the US’.

Garlinghouse also reminded the time when the internet was initially introduced. He said that there were a lot of people who wanted the internet to be banned immediately because they were not aware of its benefits.

The basis for banning the internet was that it could be misused to cause disadvantages to others, said Ripple’s CEO.

However, it was later that the whole world realized how important was the evolution of the ‘internet’, said Garlinghouse. He argued that the crypto industry also deserves more time to become fully mature in the US and in the world.