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US has made crypto rules ‘as confusing as possible,’ Ripple CEO says

By:
on May 18, 2023
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  • Ripple CEO Brad Garlinghouse says more crypto firms could leave US due to ‘confusing’ rules.
  • Europe could be the key beneficiary of this “confusion” as it provides more clarity on crypto regulation.
  • Garlinghouse made the comments during an interview with CNBC, noting that Ripple is investing outside the US.

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Brad Garlinghouse, the CEO of blockchain company Ripple, says that the US has made crypto regulations “as confusing as possible.” In crypto news this morning, the Ripple exec’s belief is that the confusion arising from regulatory confusion is pushing more crypto companies to leave the US.

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The Ripple exec made the comments during an interview with CNBC.

According to Garlinghouse, it is the US Securities and Exchange Commission (SEC) that remains “at the forefront of that confusion.” He says that the SEC has not provided clear guidance on how to regulate cryptocurrencies, which has made it difficult for companies to operate in the US.

Garlinghouse says Europe could benefit from the US “confusion”

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With the US making crypto rugulation as confusing as possible, “entrepreneurship and investment have no option but to consider moving to other jurisdictions. Among the significant beneficiaries of the negative regulatory environment in the US is Europe, he noted.

“Frankly, it’s why you’re seeing entrepreneurship and investment flowing into other jurisdictions — and certainly Europe has been a significant beneficiary of the confusion that has existed in the US.”

Other than Europe, which recently approved the landmark MiCA rules, jurisdictions showing greater growth in terms of seeking clarity for crypto regulation include the UAE, the UK and Singapore.

Providing “rules of the road” and clarity on digital assets regulation is what allows entrepreneurs and investors to constructively engage with the regulators in these countries, Garlinghouse said during the interview.

US regulators have in recent months ramped up their crackdown on crypto companies, with industry giants such as Coinbase among those to voice concerns. Konstantin Shulga, CEO and co-founder of Finery Markets, shared his views with Invezz on this hot topic – which you can read here.

In December, the SEC filed a lawsuit against Ripple, alleging that the company had violated securities laws by selling XRP, its native cryptocurrency, without first registering it with the regulator.

Ripple has denied the allegations and is fighting the lawsuit, a case whose final verdict is highly anticipated across the crypto industry. As Invezz reported, the company scored another win in relation to the case early this week.

Ripple is investing outside of the US

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Garlinghouse said that Ripple is investing more outside of the US because of the confusion surrounding US regulations. He said that 95% of Ripple’s customers are outside of the US, and that most of Ripple’s hiring this year will be outside of the US.

The Ripple CEO also talked about the company’s financial status, saying that they were in a good financial position.

His comments after Ripple announced on Wednesday that it had acquired Metaco, a Swiss crypto custody services firm. He said that Ripple funded the Metaco purchase with $250 million of cash off its own balance sheet. Garlinghouse said:

“We think Metaco is a perfect fit, from where we’re trying to grow our customers today.”

On the topic of Ripple going public, Garlinghouse said the company isn’t in a hurry to list on a stock exchange. According to him, Ripple is at the moment not in need of more capital, and that it would only list if it felt that it would enhance the ability to grow the business and the customer experience.

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