Brad Garlinghouse, the Chief Executive Officer of cryptocurrency exchange Ripple, has stated that crypto companies in the United States are eager to comply with regulations. However, he notes that the country is trailing behind others in implementing concrete guidelines for the industry. In contrast, he says that these companies are forced to seek regulatory clarity through legal battles.
Garlinghouse shared his perspective on the situation, stating: "In the US, crypto is spending more time in the judicial process to get clarity while the other biggest financial centers in the world are actively codifying rules. Most players in this industry WANT to follow the rules, but you’ll never hear Chair Gensler acknowledge that."
According to its website, the U.S. Securities and Exchange Commission (SEC) has filed lawsuits against numerous crypto platforms on charges of operating unregistered securities exchanges. Crypto companies that faced legal action from the SEC in 2023 include Kraken, Coinbase, Binance, Genesis, and Bittrex.
Investopedia reports that Ripple endured a three-year legal battle after being accused by the SEC of conducting an unregistered securities offering through its token XRP in 2020. In July 2023, it was determined by the U.S. Southern District Court of New York that XRP was a security when sold to institutional investors but not when sold on an exchange to members of the general public.
Countries such as the United Kingdom have enacted regulations for the crypto industry, including a law called Financial Services and Markets in June 2023. This legislation includes requirements related to know-your-customer (KYC) protocols and anti-money laundering (AML) protections. The European Union also introduced regulations known as Markets in Crypto-Assets (MiCA) in July 2023 aimed at protecting users and addressing illegal activity. Investopedia notes, however, that "The continuous fight between regulators, broker-dealers, investors, and the crypto industry shows that the U.S. is still evolving, regardless of the frameworks introduced and the powers given to regulators."
In 2019, France implemented a regulatory framework for digital assets through the PACTE law, establishing its financial regulator, the Autorité des marchés financiers (AMF), as the supervisory authority of virtual tokens and digital asset service providers (DASP), as reported by Adan.
Lee Reiners, a lecturing fellow at Duke University and former official at the Federal Reserve Bank of New York, expressed during Congressional testimony last year that Congress needs to take action in determining whether digital assets should be classified as securities, commodities, or something else. "I agree that regulators can, and should, do more, but I also believe that congressional action is needed to close gaps in the current regulatory framework," said Reiners.
Before his tenure at Ripple, Garlinghouse held positions including CEO of Hightail, president of consumer applications at AOL, and senior vice president at Yahoo. His career history also includes roles at Dialpad Communications and SBC Communications. He currently serves on the board of Animoto and OutMatch, according to information from the World Economic Forum.
