Launching a cryptocurrency startup in the U.S. regulatory landscape is a risky endeavor, according to Ripple CEO Brad Garlinghouse. This risk is amplified by the fact that Ripple currently faces a lawsuit from the U.S. Securities and Exchange Commission.
Speaking on a panel at the Token 2049 conference in Singapore, Garlinghouse expressed his reluctance to recommend starting a crypto company in the U.S. Instead, he advised the U.S. to observe and learn from countries like Singapore, the UK, the UAE, and Switzerland, which have successfully implemented regulations that support the crypto industry while ensuring consumer protection.
However, he accused the SEC of actively engaging in a political battle against the crypto industry using enforcement actions. CEO Brad argued that the SEC’s enforcement strategy is ineffective, citing recent legal victories by Ripple and Grayscale over the SEC as evidence. He believes these court rulings indicate a potential shift in favor of the crypto industry.
While the Ripple and Grayscale rulings lack legal binding, Garlinghouse maintains that they send a valuable signal to the industry about the current legal landscape. He acknowledged that this clarity might be temporary, as the SEC may still pursue new enforcement actions that could challenge these precedents.
In the same vein, OKX president Hong Fang has acknowledged the political and regulatory uncertainty confronting the crypto industry but urged firms to concentrate on aspects they can control.
Despite the U.S. serving as a significant market for Ripple, Garlinghouse disclosed that the company is expanding its services to countries more receptive to blockchain technology and with a better grasp of its potential benefits.
We might not be ready for a spot in the Bitcoin ETF
President Fang doubts investors’ readiness to embrace custody solutions based on a spot Bitcoin exchange-traded fund (ETF) due to the untested nature of the blockchain-based infrastructure supporting such products.
Additionally, Fang raised concerns about the crypto industry’s readiness to handle the implications of crypto-based custody solutions required for a spot Bitcoin ETF. He questioned the industry’s capacity to manage the increased demand for these services and the adequacy of safeguards to protect user funds.
However, Fang acknowledged that a spot Bitcoin ETF could attract more institutional investors, but he questioned whether these investors are prepared to navigate Bitcoin’s price volatility. He also expressed doubts about the wisdom of creating additional applications on the Bitcoin network.
According to President Fang, the crypto industry remains in its infancy and lacks the readiness to fully embrace the consequences of establishing a new monetary system based on blockchain technology. He argued that the industry must develop the necessary infrastructure and safeguards to support such a system.
