Key takeaways:
- Former US SEC Chair’s comments about the agency’s regulatory strategy drew harsh criticism from Ripple CEO Brad Garlinghouse.
- Clayton shared his opinion with CNBC, saying that the SEC needs to take legal action against particular businesses only in cases where there are solid legal justifications.
Former US Securities and Exchange Commission (SEC) Chair Jay Clayton’s comments about the agency’s regulatory strategy drew harsh criticism from Ripple CEO Brad Garlinghouse.
The SEC has launched a number of regulatory actions against cryptocurrency exchanges and businesses during the first quarter of 2023.
On June 29, 2023, Clayton shared his opinion with CNBC, saying that the SEC needs to take legal action against particular businesses only in cases where there are solid legal justifications.
He underlined that laws and cases that regulatory bodies think will hold up to court scrutiny should be introduced.
The CEO of Ripple emphasized that the former chair of the SEC had filed a lawsuit with little possibility of success in court, especially in light of the SEC’s decision to dismiss the claims without prejudice.
The SEC accused the firm and the two executives of “unregistered, ongoing digital asset securities offering” in the lawsuit filed against Ripple, Garlinghouse, and co-founder Christian Larsen in December 2020. The lawsuit claimed that the parties had raised over $1.3 billion through the sales of the XRP coin.
“As a reminder, Jay Clayton brought the case against Ripple, me and Chris Larsen. And left the building the next day.”
Clayton made remarks in June 2023 that have come to light because of the latest developments in the case involving Garlinghouse and Larsen. The SEC filed a motion in October to have the accusations against the executives dismissed, as was previously reported.
The SEC’s action comes after Judge Analisa Torres’ July decision, which found that retail transactions of the XRP cryptocurrency did not fit the legal definition of a security and partially ruled in favor of Ripple. However, the court determined that by selling XRP tokens directly to institutional investors, Ripple had broken securities regulations.
