The Chief Executive Officer of Ripple, Brad Garlinghouse, addressed the United States Commodity Futures Trading Commission (CFTC) Innovation Advisory Committee this week, calling for the adoption of the Clarity Act. He took Ripple and the United States Securities and Exchange Commission (SEC) as cases in which the encryption industry bore the undetermined costs of regulation.
Four years of litigation has cost a lot of money.
Garlinghouse states that Ripple paid approximately $150 million to outside counsel in four years of litigation with SEC. He argued that such costs could not be borne by most companies.
He also indicated that, before setting a precedent in the Ripple case, some companies had opted to settle or directly cease their business in order to avoid involvement in similar legal disputes.
Ripple says the current regulatory environment is still unclear.
According to Garlinghouse, the current state of regulation is both detrimental to consumers and to innovation. In his view, clear rules would not only help to protect users, but would also allow compliance enterprises to operate in the United States with greater clarity and responsibility.
In his formulation, the focus of the promotion of legislation was not just deregulation, but rather making the industry operate under uniform rules, reducing the costs of long-term litigation and uncertainty in enforcement.
More recruitments abroad during proceedings
Garlinghouse also uses Ripple's recruitment arrangements to explain the impact of the regulatory environment on the organization's layout. He states that, during the four years of the proceedings, about 80 per cent of Ripple recruitments took place outside the United States.
He stated that this phase had a continuing impact on the global configuration of the company. In the case of London, which remains the second largest office in Ripple, he attributed this result directly to the regulatory environment at that time.
The government's current regulatory attitude has changed.
Garlinghouse also stated that the current regulatory attitude under the United States Government had changed and named the leadership of CFTC and SEC.
In his view, the technology involved in the meeting had the potential to make the transfer of funds faster, more efficient and more accessible to more users. He stressed, however, that the real release of such potential remained dependent on the establishment of regulatory clarity through formal legislation.