Ripple CEO Brad Garlinghouse answered questions regarding the SEC’s lawsuit from the U.S. Securities and Exchange Commission (SEC).
He stressed that the company would not abandon efforts to resolve disagreements with the agency’s new leadership out of court.
Q: Why didn’t Ripple settle with the SEC?
Can’t get into specifics, but know we tried — and will continue to try w/ the new administration — to resolve this in a way so the XRP community can continue innovating, consumers are protected and orderly markets are preserved. 2/10
— Brad Garlinghouse (@bgarlinghouse) January 7, 2021
On the question whether Ripple paid exchanges for XRP listing, Garlinghouse was evasive, saying that 95% of the tokens trade outside the United States and the company has no influence over listings or holders.
He also noted that American exchanges do not delist, but ‘halt trading’, hedging their risks.
Delisting and halting are 2 separate things — most are halting trading. With 8 different govt agencies, each with their own (and sometimes opposing) views of crypto, U.S. market participants are facing conflicting policies and no surprise, some act conservatively. 4/10
— Brad Garlinghouse (@bgarlinghouse) January 7, 2021
“There is not merely a lack of regulatory clarity in the United States today, but regulatory chaos.”
In the near term, the company will file an official response to the lawsuit. According to him, shareholders are fully confident in Ripple’s position, and Tetragon, which demanded immediate redemption of its preferred shares, acted opportunistically by taking advantage of the situation.
Garlinghouse acknowledged that Ripple subsidised customers of the XRP-based payment network (On-Demand Liquidity, ODL).
“This is absolutely legal. This is how all payment systems are built. PayPal, Visa and Mastercard have incentivised or continue to incentivise their customers. We are creating something entirely new; it has its costs.”
We built a product that is the FIRST of its kind — integrating new infra comes with costs. ODL w/ XRP solves real problems with cost, speed, and settlement and that’s proven to the tune of billions of dollars. 9/10
— Brad Garlinghouse (@bgarlinghouse) January 7, 2021
As reported, the SEC accused Ripple of selling unregistered securities worth $1.3 billion over seven years. Preliminary hearings are scheduled for February 22, 2021.
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