There is an ongoing legal dispute between Ripple (XRP) and the US Securities and Exchange Commission (SEC)
There is an ongoing legal dispute between Ripple (XRP) and the US Securities and Exchange Commission (SEC). The SEC filed a lawsuit against Ripple at the end of 2020, and the lawsuit is still pending. According to many, former SEC chairman Jay Clayton is behind the lawsuit.
Jay Clayton turned down Bitcoin (BTC) ETF offers when he was president. Also known for his anti-crypto stance, Clayton was not a popular name in the crypto community. After leaving the regulator, Clayton moved into the private sector to work for One River Digital Asset Management as part of the Academic and Regulatory Advisory Council. Clayton will advise the firm on Bitcoin and other cryptocurrencies.
In his article titled “Crypto Needs Regulation, But No New Rules” published in the Wall Street Journal, Clayton states that more regulation needs to be made to the crypto industry under the current framework. The ex-chairman of the SEC continues to call Cryptocurrencies as part of “the ongoing digital revolution in the financial services industry.”
According to Clayton, US regulators have “decades of experience” with financial activities conducted by cryptocurrencies . That’s why regulators already have the tools to handle these asset classes without suffocating their promises. Clayton says:
“If analyzes coordinated by national and international authorities reveal a regulatory gap, it must be filled. But we should not start by assuming that there is a need to reinvent the regulatory regime.”
The former head of the SEC cited “bearer bonds,” a tool used by holders to request cash payments as an example. A coordinated effort between several U.S. and international organizations has “ended this market” without affecting the overall bond market, Clayton said:
“The same approach can be applied to new tools with similar risks, such as transferring bitcoin using an anonymous wallet .”
Garlinghouse Responds to Clayton’s Words
Ripple CEO Brad Garlinghouse was quick to respond to Clayton via his Twitter account. Describing the article as ironic, Garlinghouse nonetheless congratulated the former government official for changing his views on the crypto industry.
“Jay Clayton agrees with those who say that there is and is a lack of regulatory clarity for crypto and that it hinders innovation in the US. It’s certainly ironic, but it’s better than nothing.”
The manager emphasized that the technology can be useful for many legal and illegal purposes. However, he also said that compliant companies in the US are left in “mess” or are facing legal action.
The lawsuit between Ripple and the SEC is still ongoing. Although the latest developments are generally in favor of Ripple, we will have to wait to see the result.