David Schwartz, CTO of Ripple Labs, said that regulatory responses in the United States to the cryptocurrency industry could ultimately help XRP, but could also potentially harm a thriving business.
Ripple’s CTO told the Cointelegraph that he believes that many crypto and blockchain companies that plan to start in the US or move abroad are facing a restrictive regulatory environment. He described US regulators as “nested systems” in which bodies such as the Securities and Exchange Commission, the Financial Crimes Enforcement Network and the Commodity Futures Trading Commission could not reach agreement on which securities are against currency. to digital assets.
“It’s very difficult to understand what laws apply and how they apply to something new,” Schwartz said. “You don’t usually see this in other countries – someone makes the rules, and at least you know you’re talking to the right.”
“The United States is one of the few countries where there is a very tangible risk that regulators will approach you and say, ‘What have you been doing for five years, in a public place and with full coverage? “Illegal all the time.”
Schwartz’s comments come as Ripple faces lawsuits from the SEC, which filed lawsuits in December 2020, claiming that the company, CEO Brad Garlinghouse, and co-founder Chris Larsen conducted a “continuous demo of unregistered digital assets” using the token. . XRP. sale. The CTO said it feared regulators would fall on Ripple before the lawsuit, saying any cryptocurrency company is in danger of seemingly arbitrary retaliation.
“If we adopt the rules that close the doors to innovation and say, ‘Okay, we’ll make these other projects very difficult and make it very difficult for new projects to compete with them,’ that’s great for XRP, ‘” Schwartz said. so. “This is great for me, but as someone who wants the best solutions for the world, this is not the best solution.”
Since the lawsuit was announced, many cryptocurrency exchanges have either stopped trading XRP or canceled the token altogether. It is also reported that MoneyGram has terminated its partnership with Ripple.
Ripple’s position in response to the SEC’s lawsuit was to claim that XRP is similar to Bitcoin (BTC) or Ether (ETH), both of which are classified as a commodity by the regulator. However, Schwartz’s claims that regulators point out that Ripple “should have known” that XRP was an illegal offer of securities may have some relevance. It took the SEC almost eight years to file a lawsuit after the token was issued in 2013, and XRP’s nature has largely remained unchanged.
“My first recommendation to regulators in the United States is: Look at the rest of the world and do not go away.”
Cointelegraph will soon release a full video interview with Schwartz.