Clayton stressed the need of introducing policies and legal cases that regulatory bodies feel can stand up to court scrutiny.
Brad Garlinghouse, CEO of Ripple, has been vocal in his displeasure with the regulatory stance taken by the SEC under previous chair Jay Clayton. The SEC began taking action in the first quarter of 2023 to regulate crypto exchanges and firms.
On June 29th, 2023, during an interview with CNBC, Clayton stated his belief that the SEC should only take legal action against individual firms if they have solid legal reasons to do so. He stressed the need for regulatory authorities to present policies and legal cases that they are certain would hold up under court review.
After the SEC voted to drop the charges against Ripple without prejudice, the company’s CEO pointed out that the previous SEC chair had already filed a lawsuit that had a slim chance of winning in court.
It was Garlinghouse who made the following statement: “The lawsuit was filed by Jay Clayton against Ripple, myself, and Chris Larsen. And I just up and left the following day.”
The current developments in the dispute between Garlinghouse and Larsen have brought further attention to Clayton’s words from June 2023. According to earlier reports, in October the SEC made a motion to drop the allegations against the executives.
The SEC’s action comes after a judge largely sided with Ripple in July, when she ruled that XRP token retail sales did not constitute a security under the law. However, the court ruled that Ripple’s direct sales of XRP coins to institutional investors broke securities regulations.
Also Read: The UN Forms a Consultative Committee of 39 Experts to Develop International AI Regulation
