Tuesday, February 27, 2024

Ripple CEO calls U.S. SEC Chair Gary Gensler a ‘political liability’

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Brad Garlinghouse, chief executive officer of Ripple Labs Inc., speaks during the Token2049 conference in Singapore, on Wednesday, Sept. 13, 2023.

Joseph Nair | Bloomberg | Getty Images

Ripple CEO Brad Garlinghouse fired off criticism at U.S. Securities and Exchange Commission Chairman Gary Gensler on Tuesday, calling the SEC chief a “political liability.”

The comment from Garlinghouse was directed at Gensler over the SEC chief’s track record on regulating the crypto industry, lengthy delays to approving spot bitcoin exchange-traded funds, and high-profile lawsuits against companies like his.

“I do think the chair of the SEC, Gary Gensler, is a political liability in the United States. And I think he’s not acting in the interests of the citizenry, he’s not acting in the interests of the long-term growth of the economy, and I don’t understand it,” Garlinghouse said.

“I think at some point there will be a new chair of the  SEC, and I think that will be a good thing for the American people.”

The SEC did not immediately respond to a CNBC request for comment.

Last week, the SEC approved a spate of spot bitcoin ETFs, paving the way for the products to begin trading. But Gensler has repeatedly expressed concerns about the risks of approving bitcoin ETFs, stating that cryptocurrencies trade on unregulated markets and are vulnerable to price manipulation.

A day before the bitcoin ETFs were approved last week, the X account of the SEC posted a statement saying it had greenlit such a financial instrument. This later proved to be a false announcement, as the SEC disclosed its account had been compromised by hackers.

The ETFs were approved after the SEC was defeated in court over a lawsuit that sought to quash the bitcoin ETF application of digital asset manager Grayscale.

“One of the definitions of insanity is doing the same thing over and over again and expecting a different outcome,” Garlinghouse said, describing what he perceives as Gensler’s ongoing campaign against crypto. “I think Gary Gensler is doing the same thing over and over again, and he thinks that somehow he’s going to win in court. He has continued to lose in court.”

Last year, the SEC launched lawsuits against three major crypto exchanges — Binance, Coinbase, and Kraken — alleging that they had sold unregistered securities on their platforms. The lawsuits are ongoing.

Ripple is fighting the SEC in a lawsuit of its own, launched in 2020, on grounds that the firm and its executives illegally sold XRP tokens in unregistered securities sales. Charges against Garlinghouse and fellow executive Chris Larsen on the same counts were dismissed in October.

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