Ripple’s chief executive officer(CEO), Brad Garlinghouse, strongly criticized former Securities Exchange Commission(SEC) Chairman Jay Clayton’s remarks regarding the SEC’s regulatory approach. Beginning in the first quarter of 2023, the SEC has initiated various regulatory actions against crypto exchanges and companies.
During an interview with CNBC on June 29, 2023, Clayton expressed his view that the U.S. SEC should pursue legal action against specific companies only when they have strong legal grounds. He emphasized that regulatory agencies should introduce regulations and legal cases they believe will successfully withstand judicial scrutiny.
Watching this clip makes my blood boil.
(As a reminder, jay clayton brought the case against ripple, me and Chris Larsen. And left the building the next day).
— Brad Garlinghouse (@bgarlinghouse) October 28, 2023
In light of the SEC voting to dismiss the allegations without prejudice, the Ripple CEO reminded that the former SEC Chair himself had filed a lawsuit that had little chance of success in court. In the XRP lawsuit of December 2020, the SEC had accused Garlinghouse and Larsen of conducting an “unregistered, ongoing digital asset securities offering,” alleging that they had raised more than $1.3 billion.
“As a reminder, Jay Clayton brought the case against Ripple, me and Chris Larsen. And left the building the next day.”
Clayton’s statements made in June 2023 have gained attention in light of the recent lawsuit developments involving Garlinghouse and Ripple founder Chris Larsen. As previously reported, the charges against these executives were dropped by the US SEC. Notably, the charges were brought on shortly before Clayton’s tenure as SEC Chair ended, which was well before the expected expiration date in June 2021.
The recent exoneration of the two executives follows a decision by Judge Analisa Torres in July 2023, where it was determined that selling XRP on secondary markets to individual buyers does not qualify as an investment contract.