Brad Garlinghouse’s appearance at the Dubai Fintech Week started with what was billed as a “major announcement.” Ripple, a blockchain-based digital payment network and protocol which also has its own cryptocurrency (XRP), is expanding significantly in Dubai. “For years we’ve had an office here and we are now expanding,” Garlinghouse said. “And we’re also announcing that our annual conference will be hosted here in Dubai in November.”
The not-so-subtle subliminal message was clear. Ripple is embroiled in a lawsuit with the Securities and Exchange Commission (SEC), which is claiming that XRP is an unregistered security and therefore under the jurisdiction of the SEC. Ripple maintains that XRP is a commodity and that no rules have been broken. As the case rages on, Ripple is, in Garlinghouse’s own words, “voting with its feet” by expanding its non-US operations.
Garlinghouse believes that the SEC’s case against Ripple is politically motivated: that the Chairman of the SEC Gary Gensler is trying to assert his jurisdiction over the crypto space to expand the scope of his power. He has often cited the much-viewed video of Gensler that dates from when he was a Professor at MIT that shows him saying that 75% of cryptocurrencies are commodities.
“What’s happening in the US is sad. You have a country that is putting politics ahead of policy, and that’s not a good decision […] the United States is definitely stuck,” Garlinghouse said. “We’ve spent $200 million defending ourselves against a lawsuit which, from its very beginning, people thought was nonsense. The first piece of advice I’d give to any entrepreneur is not to start up in the United States.”
Unsurprisingly, given the legal morass he finds himself in, Garlinghouse is desperate for regulatory clarity. “Digital assets can be regulated differently but we need clear definitions – even now the Chairman of the SEC won’t say what it is. The SEC previously had said it’s not a security, now they won’t say the same thing,” Garlinghouse said.
It does certainly seem that the US is taking a much more stringent approach to the regulation of digital assets than parts of the Middle East and Europe, as well as Asian markets such as Singapore and Hong Kong. Ripple is therefore shifting more and more resources out of the States and into other parts of the world. “The majority of our hiring is outside the United States and primarily in London, Singapore, and Dubai,” Garlinghouse noted.
“Because that’s where the customer growth is and because that’s where the rules of the road are. We want to go where we’re wanted.”
Author: Harry Clynch
#Crypto #DigitalAssets #Ripple #SEC #Dubai