October 31, 2023
Ripple CEO Brad Garlinghouse has strongly criticized former SEC Chairman Jay Clayton's comments regarding the agency's corporate regulatory stance. The SEC had been taking action against crypto exchanges and companies since the first quarter of 2023.
Clayton's previous comments from June 2023 have gained attention in light of the recent lawsuit against Garlinghouse and Ripple founder Chris Larsen. The charges against the two executives were dropped by the SEC, with the charges having been filed just before Clayton's tenure as SEC Chair ended in December 2023, well before the expiration date in June 2021.
In a June 29, 2023 interview with CNBC, Clayton stated that the SEC should only file lawsuits against companies if there is legal backing for their argument. He emphasized that regulatory agencies should only pursue cases that they are confident will pass the judicial framework.
Garlinghouse criticized the former SEC Chair's comments, pointing out the hypocrisy of Clayton himself filing a lawsuit that had no chance of succeeding in court. In the December 2020 XRP lawsuit, the SEC accused Garlinghouse and Larsen of conducting an unregistered digital asset securities offering and raising over $1.3 billion. Garlinghouse highlighted that Clayton brought the case against Ripple, him, and Larsen, and then left the SEC the next day.
The recent dismissal of the charges against Garlinghouse and Larsen follows a July 2023 ruling by Judge Analisa Torres, which stated that the sale of XRP on secondary marketplaces to retail buyers does not constitute an investment contract.