During the 118th Congress, Ripple’s CEO expressed cautious optimism about regulatory clarity for cryptocurrencies.
Crypto regulation receives bipartisan support
On Jan. 3, Brad Garlinghouse, CEO of financial technology company Ripple Labs, stated that the newest session of Congress will finally streamline crypto regulations. Garlinghouse noted that crypto regulation was supported by both the Democratic and Republican parties.
As a public proponent of blockchain technology and among those calling for clarity in the sector, Ripple’s CEO mentioned Patrick McHenry, head of the House Financial Services Committee, Glenn Thompson, a newly elected leader of the House Agriculture Committee; Tom Emmer, House Majority Whip; and Ritchie Torres, a representative for New York’s 15th congressional district.
Congress has laid the groundwork for crypto regulation.
Garlinghouse also attributed his optimism to the fact that Congress would not be starting the regulatory process from scratch. It would instead benefit from previous bills that attempted to address issues ranging from stablecoins to centralized exchanges.
Some of these bills, such as the Securities Clarity Act, sought to provide more explicit definitions of what digital assets qualified as securities. Due to a lack of clarity on the issue of digital securities, several crypto companies have received cease-and-desist orders from state regulators or have been hit with class-action lawsuits from disgruntled customers.
While acknowledging that no single bill could satisfy all of the crypto industry’s players, the Ripple CEO was quick to emphasize that the proposals already before Congress should serve as the foundation for meaningful debate.
Garlinghouse cited jurisdictions with active crypto regulatory frameworks as Brazil, Japan, Singapore, and the European Union (EU). He also stated that one of the United States’ most important allies, the United Kingdom, was far ahead in its efforts to regulate cryptocurrency.
However, the outspoken crypto billionaire decried the lack of coordinated global standards in crypto regulations, which he claimed drove crypto companies to countries with little, if any, regulatory practices, fostering situations like the FTX collapse.
Ripple is hampered by regulatory obscurity.
It’s understandable why Garlinghouse wants crypto regulations in the US finalized. The US Securities and Exchange Commission sued his company, which also manages the global payment network RippleNet and the XRP cryptocurrency, in December 2020. (SEC). It claims XRP was sold as an unregistered security.
According to the SEC, Ripple raised billions of dollars through XRP sales but failed to comply with legal requirements by not registering the offerings as securities. Ripple denied the allegations, claiming that XRP is a currency, not a security.
Garlinghouse said he anticipated the case against his company would be settled in the first half of 2023 during a panel discussion at the DC Fintech Week conference in October, while he conceded that it was challenging to predict. There was still no indication of when the issue would be rectified as of the time of this writing.