On June 16, the Ripple CEO, Brad Garlinghouse, recently released a video on Twitter. Therein, he said, upon perusing Dr. Hinman’s emails, which were made public by the United States Securities and Exchange Commission (SEC) due to legal pressure, he felt compelled to document the information.
Dr. Hinman, the SEC, and the regulatory measures concerning cryptocurrencies that the agency seems hesitant or incapable of implementing in the United States were all focal points of Garlinghouse’s revelations.
Despite Garlinghouse’s infrequent video postings, he found it necessary to address the cryptocurrency community following a challenging week.
The SEC failed to reach a regulatory agreement
He expressed that after two years, seven court orders, and legal fees exceeding $100 million, the SEC finally handed over records related to Hinman’s speech, internal communications within the regulator, and other associated materials.
Based on the documents cited by Garlinghouse, the SEC failed to reach a consensus regarding the legislation required for regulating cryptocurrencies, specifically when a token no longer qualifies as a security. Moreover, they cautioned Hinman that his speech would further perplex the public.
Furthermore, he highlighted that “Hinman received substantial payments through his law firm, which had entered into a partnership with other parties having vested interests in the speech above.” At the same time, he was employed by the SEC.
According to Garlinghouse, the documents reveal that the SEC has aggressively pursued enforcement actions against cryptocurrency entities while feigning openness and urging them to register, even though they were continuously deceived regarding their alleged guidance.
Garlinghouse asserts that Ripple had proactively engaged with the SEC regarding compliance with cryptocurrency regulations for years before this incident.
He had discussed the complaint against Ripple with Jay Clayton, the SEC chairman at the time, who filed it the day before resigning in 2020, and William Hinman, although legal representatives were not present.
Neither Clayton nor Hinman ever suggested that XRP , the native currency of the XRP Ledger, was a security. Garlinghouse claims that the information he confidently provided them was later used against Ripple in court.
According to Garlinghouse, the SEC has refused to share any specifics regarding the charges mentioned in a Wells Notice sent to Ripple, implying that they were contemplating a lawsuit for potential violations of securities laws.