Ripple CEO Brad Garlinghouse took to Twitter to respond to a few select questions on the U.S. Securities and Exchange Commission (SEC) enforcement action against the blockchain firm.
The SEC sued Ripple on Dec. 22 accusing the firm and its two executives – Garlinghouse and Chairman Chris Larsen – of improperly raising more than $1.3 billion in the sale of the XRP security token.
Garlinghouse has publicly defended the company, claiming that the defendants are innocent because the SEC is “wrong on the facts, the law and equities.”
Garlinghouse chose to address five key questions because due to the case, “there are new considerations to what can / should be said publicly after the litigation process starts.”
The five key questions
The first question focused on why the firm didn’t settle with the SEC. He said that they tried to do so previously and will do the same with the incoming Joe Biden’s administration.
Garlinghouse wants to “resolve this in a way so that the XRP community can continue innovating, consumers are protected and orderly markets are preserved.”
On whether Ripple paid exchanges to list XRP, the CEO said the digital asset is one of the most liquid assets globally with 95% being traded outside the U.S. He added that the company has no control over who owns or lists XRP because it is open source and decentralized.
Following the complaint, several exchanges have removed XRP markets on their platforms. Garlinghouse explained that there is a difference between delisting. He said the majority are halting XRP trading.
Garlinghouse is not surprised that some platforms have acted this way because “U.S. market participants are facing conflicting policies.”
Garlinghouse claimed that the U.S. has moved from a lack of regulatory clarity to regulatory chaos. He expects the new administration to reintroduce the Digital Economy Exchange Act (DCEA), a framework that treats digital currencies the same as commodities. He referred to DCEA as common-sense legislation that would provide clarity to the industry.
He said Ripple is not silent about the lawsuit. The process may be slow and seem as if nothing is happening but there is a lot being done behind the scenes, he added.
To all asking for updates on the SEC lawsuit: no surprise, the legal process takes time! We may be quiet but we are not idle. Our full legal team will announce themselves shortly and we’ll be filing our initial response to the SEC’s unproven allegations within weeks.
— Stuart Alderoty (@s_alderoty) January 7, 2021
He claimed that investors still have faith in the company. However, Ripple’s Series C investor Tetragon recently filed a suit against Ripple in the wake of the SEC charges. Garlinghouse said Tetragon, which owns a 1.5% stake in the blockchain firm, is trying to take advantage of the situation.