SEC Arbitrarily Approved Coinbase’s IPO While it Listed XRP

Brad Garlinghouse, CEO of Ripple Labs is arguing the U.S. Securities and Exchange Commission (SEC) has been applying its policies at random to different players in the crypto industry.

In an appearance during the Collision technology conference in Toronto, Garlinghouse took the SEC’s approval of Coinbase’s S-1 initial public offering (IPO) as an example of contradicting itself. At the time, the cryptocurrency exchange had XRP listed on its platform, while the US regulator claimed Ripple’s native token to be an unregistered security and sued the firm for it. He said:

“When Coinbase went public, which really wasn’t that long ago, Coinbase was trading XRP. They enabled consumers and businesses to trade XRP.

The SEC had to approve their S-1 such that Coinbase could go public. The SEC now seems to take the position when they sued us that, ‘Hey, XRP is a security and always has been.’

But they approved Coinbase going public, even though Coinbase is not a registered broker-dealer. So there are contradictions here of the SEC almost not, within its own organization, knowing left hand, right hand.”

Furthermore, according to Garlinghouse, the government need to work along with the crypto industry and provide clear regulatory guidelines while consistently enforcing them:

“The first thing I think about, it maybe should be more clearly regulated. I think about consistency.

One of the challenges for every crypto company right now is it’s not clear where the rules of the road are. You have some examples where regulators are going after companies, and then you look at another company doing almost the exact same thing and they’re not saying anything.

Consistency, so everyone has a firm set of rules to follow. I think the vast majority of people in the crypto industry want to play by the rules. Let’s just be clear about what the rules are.

Let’s be super clear about what we’re trying to regulate.”

Should the government communicate its policies and stance on crypto by enforcing penalties rather than a written set of rules, the Ripple CEO warned, progress and innovation in the entire financial ecosystem is at risk:

“I think it’s very clear that the SEC, instead of doing the hardwork to define a new set of clear rules, a new set of clear regulations, both from the SEC and really the US government in general, they’ve instead decided, ‘Hey, we’re going to do regulation through enforcement,’ which is not efficient and really has stifled innovation in the United States.”