In a recent X social media platform post, Brad Garlinghouse, CEO of Ripple, expressed his “disbelief” in response to former U.S. Securities and Exchange Commission Chair Jay Clayton’s recent comments on cryptocurrency regulation. Garlinghouse finds Clayton’s remarks hypocritical, given Clayton’s prior initiation of the lawsuit against Ripple.
Clayton’s evolving stance on crypto
Speaking at an event organized by the Council on Foreign Relations (CFR), an independent nonpartisan think tank, Clayton showcased a progressive and open-minded attitude towards cryptocurrency entrepreneurs and regulation. He expressed sympathy for entrepreneurs seeking to raise capital from the public and suggested that regulators should explore ways to facilitate capital raising for “smaller and medium-sized” companies.
According to Clayton, the appropriate approach to regulating cryptocurrencies is to recognize them as “technology, not a product.” He argued that cryptocurrencies represent a different technology delivering known products more efficiently, downplaying the significance of classification issues related to whether a product is deemed a security or commodity.
Ripple’s legal victory against the SEC
Clayton gained prominence for initiating a lawsuit against Ripple in late 2020, accusing the company of illicit XRP sales. However, Ripple emerged victorious in the case, with U.S. District Judge Analisa Torres ruling in July that secondary sales of XRP did not constitute the sale of investment contracts. Subsequently, the SEC moved to drop charges against both Garlinghouse and Ripple founder Chris Larsen.
In November, Garlinghouse asserted his readiness to escalate the legal battle to the Supreme Court if necessary.