Brad Garlinghouse is addressing the U.S. Securities and Exchange Commission’s (SEC) lawsuit against Ripple.
In a lengthy tweetstorm, Ripple’s CEO offers new details on the company’s interactions with the SEC prior to the lawsuit, which alleges Ripple sold XRP as an unregistered security.
“I’m not going to litigate the SEC’s unproven allegations on Twitter, and as you can imagine, there are new considerations to what can/should be said publicly after the litigation process starts. However, I would like to address five key questions I’ve seen.
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.”
The CEO says XRP remains a highly liquid asset. To date, support for the cryptocurrency has been dropped by more than two dozen exchanges.
“XRP is one of the most liquid (top 3-5) digital assets globally, and 95% is traded outside the US. Ripple has no control over where XRP is listed, who owns it, etc. It’s open-source and decentralized.
Delisting and halting are two separate things – most are halting trading. With eight different government agencies, each with their own (and sometimes opposing) views of crypto, US market participants are facing conflicting policies and no surprise, some act conservatively.
We’ve moved from lack of regulatory clarity to regulatory chaos in the U.S. This is why regulation by enforcement is such bad public policy. With the new administration, we expect the Digital Commodity Exchange Act (DCEA) to be reintroduced – common-sense legislation providing clarity to the entire industry.”
As for why Ripple has not yet responded to the SEC’s allegations, Garlinghouse reminds his followers that the legal process is slow and says the firm plans to file its initial response within a few weeks.
Garlinghouse also responds to concerns that investors may have lost faith in Ripple and that the firm paid its customers to use XRP.
“Q: Do investors have faith in Ripple?
Yes, we have real shareholders. That is how you own Ripple equity – buying our stock, not buying XRP. We’re disappointed that Tetragon (who owns 1.5% of Ripple) is seeking to unfairly advantage itself through the SEC’s allegations.
Q: Did you pay customers to use XRP?
We have provided some customers, especially first movers, with incentives to use On-Demand Liquidity (ODL) – this is building a payments network 101 (and totally lawful). Every payments network (PayPal, Visa, MC, etc) has or still uses incentives.
We built a product that is the FIRST of its kind – integrating new infrastructure comes with costs. ODL with XRP solves real problems with cost, speed, and settlement and that’s proven to the tune of billions of dollars.”
In closing the thread, Garlinghouse says Ripple is on the “right side of history ” and that they “look forward to [their] day in court – as well as engaging with the new SEC leadership once appointed.”
A pretrial hearing on the case has been set for February 22nd, 2021.
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