Ripple Chief Brad Garlinghouse has stated that the United States Securities and Exchange Commission (SEC) assisted Ethereum to surpass XRP as the second-largest asset on the crypto leaderboard.
SEC Helped Ethereum Surpass XRP: Garlinghouse
Garlinghouse of blockchain firm Ripple and the XRP token has been sharing his insights regarding the current state of regulations in the crypto industry in light of the SEC lawsuit against Ripple.
Speaking at DC Fintech Week virtual conference, Garlinghouse suggested that the regulatory clarity that Ethereum earned from the agency allowed it to succeed and subsequently Flippen XRP:
“Within the last few years, XRP was the second most valuable digital asset. As it became given that the SEC had given a hall pass to ETH, ETH has obviously kind of exploded… That clarity has helped.”
Notably, the SEC is locked in conflict with Ripple over claims that the company’s token was sold to investors as an unregistered security. Ripple filed a Freedom of Information Act (FOIA) request earlier this year, asking the SEC to explain why it declared Ether a non-security asset. In July, Magistrate Judge Sarah Netburn allowed Ripple to depose William Hinman, the former director of the SEC’s Division of Corporation Finance who said in a speech back in 2018 that Ether was not a security.
Garlinghouse further noted that the free market is the only force that is supposed to determine winners and losers and not financial regulators. Moreover, the SEC claims to be safeguarding investors but at least 50,000 United States-based XRP holders are “trying to sue the SEC for ‘protecting them’”.
XRP was the second-most valuable crypto asset in December 2017, but has since lost ground and is currently sitting on the seventh spot. Ethereum, on the other hand, is strongly holding the No.2 spot as it grows in popularity among decentralized finance (DeFi) and non-fungible token (NFT) enthusiasts. Garlinghouse observed that while the SEC has maintained that securities laws are so clear, they have declined to directly state whether Ethereum is a security.
The Ripple boss also stated that the SEC has adopted a hostile stance against the crypto sector, as is evidenced by the latest enforcement actions directed towards his firm and cryptocurrency exchange Coinbase.
Ripple Is Expanding Outside The U.S. Despite SEC vs. Ripple Case
Garlinghouse also reiterated his concerns about the lack of clarity and certainty in the US. According to him, the company has not onboarded any new American customers as a result of the hazy regulations.
Nonetheless, the lawsuit is not putting a damper on its expansion plans. “We are growing a lot more outside the United States,” Garlinghouse opined.
Meanwhile, the deadline for discovery was extended by the court from November 12, 2021, to January 14, 2022, to give both parties enough time for fact discovery and expert depositions. The judge argued that the deadline extension would not affect the schedule of the lawsuit. Yet, attorney Jeremy Horgan now believes the case is not likely to be resolved until March-May 2022.