Brad Garlinghouse, CEO of Ripple, said the lack of clarity in US regulation of cryptocurrency is “disappointing.”
Known as the cryptocurrency XRP, the fintech company has been in a major legal dispute with the US Securities and Exchange Commission since last year.
In December, the Securities and Exchange Commission filed charges against Garlinghouse and one of the founders of Ripple, alleging that they raised more than $1.3 billion through an unregistered securities offering.
Garlinghouse said that unlike countries in Asia, the US has yet to provide clear regulatory guidelines for cryptocurrencies.
“I give credit to markets like Singapore and even parts of Korea where there have already been deliberate government-led efforts to define and put in place clear regulatory frameworks around cryptocurrencies,” he told CNBC’s “Squawk Box Asia” on Friday.
He cited the company’s ongoing legal battle with the Securities and Exchange Commission as an example of where the regulatory framework remains unclear.
He noted, “It is ironic here in the US that they did not provide the same clarity. It is the only country on the planet that has said that XRP is nothing but a currency.” “The Securities and Exchange Commission (SEC) said… XRP is a security tool. And so we are now engaged in a court discussion. So far, I am satisfied with the way this is going, but it is certainly frustrating.”
In a complaint filed in December, the SEC said Ripple “created an information vacuum” when it did not disclose the offer to investors. The agency argues that the company was required to share this type of material information with investors because XRP can be considered an investment contract “under certain conditions” and “hence a guarantee under federal securities laws.”
Financial regulators globally are looking at how to regulate the cryptocurrency industry.
Garlinghouse downplayed the importance of the current scrutiny of cryptocurrencies, saying that the industry should continue to focus on what these technologies provide to customers.
“I think at the end of the day, the industry should focus on utilities. Are these technologies solving real problems for real customers,” he said, adding that Ripple will continue to leverage the XRP ledger and tokens to make payments efficient.