Ripple CEO criticizes SEC’s Regulation by Enforcement Strategy

Brad Garlinghouse, the chief executive officer of Ripple, has criticized the U.S. securities regulator for recent statements made by its attorneys that hint at a potential appeal in the case against Ripple.

In a July 23 tweet, Garlinghouse criticized the regulator for its “regulation by enforcement” strategy, contending that it has only served to harm retail investors.

Garlinghouse tweeted on July 23,”The SEC created this mess by declaring itself the crypto police when it lacked legal jurisdiction.”

What has that accomplished? While the SEC holds press conferences, consumers are left holding the purse strings in bankruptcy court, he added.

Garlinghouse’s criticism was in response to the SEC’s most recent comments about Ripple, which the regulator indicated at an appeal of the split-decision ruling against Ripple Labs.

The SEC used its ongoing case against Terraform Labs founder Do Kwon on July 21 to express its concerns with the decision that retail sales of XRP on exchanges did not meet the legal definition of a security.

“Respectfully, those portions of Ripple were wrongly decided, and this Court should not follow them,” SEC attorneys wrote, arguing that these XRP transactions should have been considered securities.

“SEC staff is considering the various available avenues for further review and intends to recommend that the SEC seek such review,” they added.

Speaking directly to the SEC’s remarks, Garlinghouse stated that it was “absurd” to criticize a judge for simply applying the law.

“We are all aware that legislation—nnot more regulation through enforcement—iis the only way forward to provide clear rules and safeguard retail,” he continued.

Stuart Alderoty, the chief legal officer of Ripple Labs, added that clarifying that XRP is not a security is akin to “explaining to a flat-earther that the world is round.”

Gary Gensler, chairman of the Securities and Exchange Commission (SEC), conveyed his disappointment with the court’s ruling on XRP’s status as a security on July 17, adding that the agency would continue to evaluate this opinion.

According to data from TradingView, the price of Ripple Labs‘ XRP at the time of publication is $0.73, an increase of nearly 50% over the past month.