Brad Garlinghouse, CEO of Ripple (XRP), disclosed that he recently faced a bank account closure due to increased regulatory scrutiny on the cryptocurrency industry. Garlinghouse stated that Citigroup, the financial institution where he had a 25-year-old account, told him to move money within five days or else he would have to close the account. The banks are closing because of regulatory pressure when working with high-profile crypto figures.
Garlinghouse said the bank cited his position in the cryptocurrency space as a reason for his decision. A big issue in the crypto industry is increased regulatory oversight, which has affected several crypto industry leaders and their finances. Outside of crypto, Garlinghouse expressed concerns that other financial institutions could follow suit and said he believes crypto executives will have more difficulties securing banking services.
“These account closures could become more aggressive, limiting access to core banking services for those in the currency industry,” Garlinghouse said.
He noted that this mirrored the broader struggle federal authorities had taken with regulation, a hostile approach, he said. The action is yet another example of the discord between crypto advocates and regulatory bodies and comes as banks find themselves caught in the crossfire.
Brad Garlinghouse Advocates Clearer U.S. Crypto Regulations
However, Garlinghouse is hopeful that American cryptocurrency regulation will prosper. He says new political changes could soon open the door to more blockchain innovation as regulatory policies shift in the country’s favour following the next presidential election. The current administration’s position has also encouraged U.S.-based crypto and fintech companies to move to countries with clearer regulations.
Brad Garlinghouse says fintech companies should consider international incorporation to guarantee regulatory stability and allow their businesses to grow. However, he pointed out that other countries already have clearer regulatory frameworks in place that allow the industry to grow between bouts of uncertainty. Adapting financial policies could help the U.S. regain the ground it has lost in the rapidly evolving financial landscape, he told the U.S., arguing.
Ripple CEO’s comments relate to his belief that blockchain and cryptocurrency will play critical roles in future monetary systems. If the US continues with this method, he warned that it could miss strategic technological opportunities. As an industry, the rules need to be clear for us to go global. Garlinghouse reminded us of the suggestion that U.S. companies expand and take technology and products globally.
Ripple Faces Backlash Over Political Contributions
Recent political donations by Ripple have stirred the crypto community into conflict, with questions being asked regarding Ripple’s views on U.S. regulatory policies. Ripple co-founder Chris Larsen donated $10 million to the same campaign, while Ripple donated $1 million. Many of these donations have been criticized by some portions of the crypto community, who question the alignment of what Ripple appears to be doing and what Garlinghouse’s criticism of the current administration actually is.
It's time for the Democrats to have a new approach to tech innovation, including crypto. I believe @KamalaHarris will ensure that American technology dominates the world, which is why I’m donating $10M in XRP in support of her. https://t.co/vb9KJA87JK
— Chris Larsen (@chrislarsensf) October 21, 2024
Many in the community say Ripple’s crypto donations contradict what Brad Garlinghouse said in previous criticism of the Biden administration’s approach to crypto regulation. Four also voiced concerns that there was a conflict between its public statements and political affiliations. However, some feel Ripple’s contributions could be complicating its position, especially with Garlinghouse’s assertions about regulatory hostility toward crypto.
Amid this criticism, Brad Garlinghouse stressed again the need for concrete regulatory guidelines on the crypto industry. While XRP, Bitcoin, and Ethereum are examples of the digital assets he’d be talking about, he emphasized the need for consistent, straightforward rules that apply equally across the board regarding digital assets. Then there’s the uncertainty created by Ripple’s legal dispute with the SEC, which in recent rulings went in Ripple’s favour, with Garlinghouse calling the verdict a pivotal moment toward industry clarity.
The Final Thoughts
The drawn-out legal fight between Ripple and the SEC continues to dominate cryptocurrency regulatory discussions. The recent court decision brought much relief to the industry when it ruled that XRP, the creator of Ripple’s cryptocurrency, was not a security. ‘Crypto wins with this judging, as market regulation must be even for crypto,’ Garlinghouse said on the ruling.
However, Brad Garlinghouse criticized the SEC for inconsistent regulation of digital assets, such as how it treats Bitcoin versus Ethereum. He stressed that the industry needs clear, reliable guidelines that help fuel growth and provide assurance and compliance. The Ripple-SEC case exemplifies broader issues crypto companies face when navigating regulatory challenges.
