- Ripple CEO has warned of a potential exodus of crypto firms to Europe amid ongoing regulatory crackdowns.
- The U.S. blockchain services firm has expanded its global presence by acquiring a Swiss crypto startup.
- Garlinghouse has praised Europe, the UAE, the UK, and Singapore for their clear digital asset regulations.
In an exclusive interview with CNBC, Ripple CEO Brad Garlinghouse expressed concerns over the confusing regulations in the United States, predicting that such ambiguity would drive more crypto companies to seek opportunities outside the country.
Garlinghouse Praises Other Countries’ Digital Asset Regulations
Garlinghouse acknowledged the leadership provided by Europe, as well as countries like the United Arab Emirates, the United Kingdom, and Singapore, in offering clear regulatory frameworks for digital assets.
He emphasized that well-defined rules enable entrepreneurs and investors to engage constructively with regulators. The CEO also noted that the lack of regulatory clarity in the U.S. has resulted in entrepreneurship and investment flowing into other jurisdictions, particularly benefiting Europe.
Sponsored
Garlinghouse’s remarks followed Ripple’s recent acquisition of Metaco, a Swiss crypto custody services firm. This move coincides with heightened scrutiny from U.S. regulators targeting companies such as Ripple and Coinbase.
“I think it’s fair to say the U.S. has made it as confusing as possible as to what the rules of the road are for the crypto industry. The SEC has really been at the forefront of that confusion.” Garlinghouse stated.
Ripple CEO Cites SEC as Reason for Crypto Firms Leaving U.S.
Garlinghouse pointed out the confusing nature of regulations in the U.S., suggesting that the Securities and Exchange Commission (SEC) has played a significant role in generating this uncertainty. This regulatory ambiguity has prompted crypto firms to contemplate relocating to signal to regulators the potential loss of technological innovation within the country.
Ripple itself is currently embroiled in a lawsuit filed by the SEC, alleging that the company, Garlinghouse, and co-founder Chris Larsen violated securities laws by selling XRP without registering it with the SEC.
Sponsored
“Unfortunately, [the crackdown] has encouraged companies like Ripple to invest more outside of the U.S.” Garlinghouse stated.
XRP serves as the native cryptocurrency on the Ripple network. Garlinghouse lamented that the crackdown on crypto companies had compelled Ripple to focus more on investments outside the U.S.
95% of Ripple’s Customers are Non-U.S. Entities
When questioned about the recent bankruptcy of crypto giant FTX, Garlinghouse classified the event as a fraud, emphasizing that it is not exclusive to the crypto industry. He reiterated the perplexity surrounding the regulatory landscape in the U.S. and how it has prompted companies like Ripple to prioritize investments abroad.
Garlinghouse revealed that 95% of Ripple’s customers are non-U.S. entities and that most of the company’s hiring efforts this year will take place outside the U.S.
On the Flipside
- While Ripple highlights the leadership provided by Europe and other countries in regulating digital assets, it’s important to recognize that different jurisdictions have varying approaches and priorities regarding crypto regulations.
- The decision of crypto firms to invest outside the U.S. may be driven by a combination of regulatory factors and their strategic goals rather than solely due to the confusing nature of U.S. regulations.
- While Ripple claims that most of its customers are non-U.S. entities, it is worth considering the potential reasons behind this distribution and its impact on the company’s operations within the United States.
Why This Matters
The increasing number of crypto companies considering relocating from the U.S. due to confusing regulations highlights the urgent need for clear and comprehensive regulatory frameworks in the country.
As Europe and other jurisdictions provide greater regulatory clarity, the U.S. risks missing out on key technological innovations and losing its position as a leading player in the crypto industry.
To learn more about Ripple’s collaboration with Metaco to dominate the crypto custody market, read here:
Ripple and Metaco Join Forces to Conquer Crypto Custody Market
To stay updated on Ripple’s recent claim of victory over the SEC in the Hinman document claim, read here:
