The chairman criticized the SEC for regulating the cryptocurrency industry, saying that the SEC had exceeded its legal authority and left clients “holding the bag in chapter courtroom.”
This opinion follows the SEC’s most recent declaration that it would render a historic decision in favour of Ripple.
The chairman is upset because of a legal disagreement between Ripple and the SEC, which has repercussions for the larger cryptocurrency industry.
Recently, the SEC hinted that it intended to appeal a U.S. District Court decision that favored Ripple Labs. Analisa Torres’ ruling said that almost half of Ripple’s cryptocurrency XRP sales were legal and did not breach any investor protection laws. The decision has given other defendants in cases against the SEC that are similar to this one a glimmer of hope, which the regulatory body now seeks to squash.
Garlinghouse, however, advised against using the judiciary as a scapegoat for how it applied the law. He insisted that for the cryptocurrency industry to advance and protect retail traders, clear laws—rather than “extra regulation by enforcement,”—were what was most important at the moment.
Garlinghouse advised congressional representatives like Ritchie Torres and Patrick McHenry for supporting this mindset in a later tweet.
The SEC filed an appeal because it disagreed with Judge Torres’ decision and claimed that her decision “provides baseless necessities” to the analysis of whether an asset qualifies as a security.
They contend that her position runs counter to the fundamental tenet of federal investor protection legislation, which mandates greater protection for ordinary investors than for institutional ones.
Torres’ logic, according to the SEC, was “unimaginable to reconcile” with these securities law regulations, setting the path for the ongoing legal dispute.