Ripple CEO says SEC has lost sight of mission to protect investors

cnbc.com:

The CEO of blockchain company Ripple has some strong words for the U.S. Securities and Exchange Commission.

Brad Garlinghouse told CNBC's Dan Murphy at the company's Ripple Swell conference in Dubai that he thinks the agency has lost sight of one of its key tasks as a regulator.

«I think the SEC, in my opinion, has lost sight of their mission to protect investors. And the question is, who are they protecting in this journey?» Garlinghouse said Thursday. The SEC was not immediately available for comment when contacted by CNBC.

The SEC in 2020 accused Ripple and its executives of conducting a $1.3 billion securities fraud via sales of XRP to retail investors. Ripple, the regulator alleged, failed to register an ongoing offer and sale of billions of XRP tokens to investors, depriving them of adequate disclosures about XRP and Ripple's business.

In July, Ripple was handed a pivotal victory as a judge ruled that XRP is not in and of itself a security. Following this, the SEC was denied a request for an interlocutory appeal. Then, in October, the SEC dropped its securities law violation charges against Garlinghouse and Ripple executive Chris Larsen.

The next key step in the case is the remedies discovery process. The SEC has 90 days from Nov. 9 to conduct remedies-related discovery, according to a proposed schedule submitted by the SEC.

«I think it is a positive step for the industry, not just for Ripple, not just for Chris and Brad, but for the whole industry, that the SEC has been put in check in the United States. And I'm hopeful this will be a thawing of the permafrost in the United States for really seeing an amazing industry that has immense potential thrive in the largest economy in the world,» Garlinghouse told CNBC.

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