March 27, 2024
U.S. Unfavorable for Crypto Startups
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Ripple CEO Brad Garlinghouse: U.S. Unfavorable for Crypto Startups Amid Legal Battles

According to Ripple CEO Brad Garlinghouse, the United States is currently one of the most unfavorable places in the world to launch a cryptocurrency startup, primarily due to his firm’s ongoing legal dispute with the U.S. securities regulator.

During a panel discussion at Token 2049 in Singapore on September 12, Garlinghouse expressed his reservations about starting a company in the United States, stating, “The only country I would not encourage you to start a company in right now is the U.S.”

Garlinghouse advocated for the U.S. to learn from countries like Singapore, the United Kingdom, the United Arab Emirates, and Switzerland, which have implemented policies fostering crypto innovation while safeguarding consumers. He placed responsibility for the challenging environment on the Securities and Exchange Commission (SEC), accusing the agency of waging a political battle against the cryptocurrency industry through its legal actions.

Garlinghouse argued that the SEC’s lawsuit strategy was ineffective and suggested that Ripple and Grayscale’s legal victories over the SEC might indicate a shift in the industry’s favor, stating, “I think you’re seeing the momentum shift. I think that it used to be that a lot of judges were like, Well, the SEC is always right, and they weren’t fighting that, but I think you’re starting to see the pattern change.”

While Garlinghouse acknowledged that the outcomes of the Ripple and Grayscale cases are not legally binding, he noted that they offer greater clarity to crypto exchanges and custody providers operating in the U.S., at least for the time being. Hong Fang, the president of OKX, acknowledged the political dynamics but emphasized the importance of crypto firms focusing on what they can control.

Despite the United States being a significant market for Ripple, Garlinghouse revealed that his company is expanding its services to countries that he believes are more forward-thinking and have a better understanding of blockchain technology’s potential benefits. During the panel discussion, Fang expressed doubts about whether investors are prepared for custody solutions built around a potential spot Bitcoin exchange-traded fund, as much of the new blockchain-based infrastructure has not yet been thoroughly tested by the public.

Fang raised concerns about custody in the context of a spot Bitcoin ETF, questioning whether the industry is ready for such a development from both an infrastructure and volatility perspective. He highlighted the creation of a new monetary system built on blockchain technology, suggesting that the industry might not be fully prepared for it yet.

Image by freepik

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