Ripple’s CEO says beating the SEC in court isn’t enough to make U.S. banks less skittish toward crypto—there must be clear policy

Ripple CEO Brad Garlinghouse speaks during a D.C. FinTech Week event in Washington on Nov. 8, 2023. Ting Shen—Bloomberg via Getty Images

A court victory over the Securities and Exchange Commission in July and the dismissal of charges against two top executives last month may have given Ripple a reprieve, but that doesn’t mean the company’s regulatory headaches are over.

Speaking at the D.C. Fintech Week conference on Wednesday, CEO Brad Garlinghouse said that despite the company’s success in court against the SEC, some U.S.-based banks remain hesitant to dive deeper into crypto.

“They’re like, ‘Look, even though you won the case, the United States government is still hostile towards crypto, the OCC [Options Clearing Corporation] is hostile towards crypto.’ And until that changes, the banks in the United States are not going to engage meaningfully,” he said.

Ripple’s court victory over the SEC in July—a case in litigation since 2020—was seen as a boon not just for the company but the entire industry. In a landmark decision, a U.S. district judge ruled that the token created by the company was not a security in all cases.

Garlinghouse added that the SEC’s stance toward crypto, and especially Chairman Gary Gensler’s claim that crypto is the “Wild West”, is part of a political agenda, in lieu of clear policy, that is stymying the industry’s growth in the U.S.

While the U.S. has been openly hostile toward crypto, other countries are welcoming companies and those related investments with clear policies, Garlinghouse said. Meanwhile, the U.S. is squandering its head start and losing market share.

“I don’t think the window has passed for the U.S. to be a leader,” he added. “But I think every day that goes by, these other markets, they want the entrepreneurs there, they want growth,” 

A majority of Ripple’s employees are still U.S.-based, and Garlinghouse predicts that within 10 years the country finally will adopt a constructive regulatory framework for crypto. But until that happens, Ripple will continue expanding elsewhere, with Garlinghouse repeating an earlier statement that 80% of Ripple’s hiring this year will be outside of the U.S.

“Why would I want to hire more and more people in the United States,” Garlinghouse added, “when the U.S. is making it hostile for me to operate here?”