Regulation
Brad Garlinghouse criticizes SEC’s inconsistent and confusing regulatory practices
Ripple CEO Brad Garlinghouse has criticized the US SEC for its hypocrisy in handling cryptocurrency regulations. The remarks came in the context of recent events surrounding the SEC’s lawsuit against Binance, where the regulator sought to amend the original complaint.
On Tuesday, the SEC and the defendants — Binance Holdings Ltd., BAM Trading Services Inc., BAM Management US Holdings Inc., and Changpeng Zhao (CZ) — filed a joint response to the court’s earlier order. The SEC said it intends to amend its complaint to address issues regarding “third-party crypto asset securities,” after previously classifying several crypto assets as securities.
The SEC’s Inconsistent and Confusing Regulatory Practices
Garlinghouse criticized the SEC for its inconsistent and confusing regulatory practices and cited the SEC’s hypocritical approach, noting that SEC Chairman Gary Gensler has said the rules are clear, but the SEC doesn’t seem to be able to enforce them consistently.
Garlinghouse pointed out the contradiction between SEC Chairman Gary Gensler’s statements and the agency’s actions. job on X, he said: “A political agenda and/or bad faith litigation tactics. Certainly not ‘fidelity to the law.’”
The SEC’s action sought to prevent a judicial decision on whether SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS and COTI are securities under the Howey test.
The SEC filing states that it plans to amend the complaint to address concerns about “third-party crypto asset securities” so as not to require an immediate court ruling on the matter. Binance noted that the SEC’s decision to amend the complaint indicates that the possible changes are not limited to the tokens at issue.
Growing regulatory uncertainty!
Garlinghouse’s comments underscore the cryptocurrency industry’s growing frustration with regulatory uncertainty.
Ripple’s CEO has consistently stressed the urgent need for consistent and transparent regulations to support the industry’s growth and innovation. The company’s legal battle with the SEC, centered on whether XRP is a security, led to a landmark ruling in July 2023. Other companies, including Coinbase, have also been actively seeking regulatory clarity to create a more stable and predictable environment for the crypto industry.
SEC Actions Spark Debate Among Legal Experts
Top legal experts have also weighed in on the SEC’s recent actions. Stuart Alderoty, CLO of Ripple, noted that the move leaves the tokens vulnerable in other cases. He noted that the agency cannot ignore these tokens in one case while pursuing them in another. Jake Chervinsky, CLO at Variant Fund, also echoed this sentiment and views the SEC’s decision as a litigation tactic and not a policy change.