US’s Securities & Exchange Commission (SEC) has been under criticism because according to most of the crypto community members SEC is deliberately targeting cryptocurrencies without any rationale. Brad Garlinghouse, the CEO of Ripple Labs too joined the criticism and raised his voice against the actions of SEC by suggesting that his company has been trying to settle the ongoing dispute with the officials of SEC, however, it is like talking to the walls who only listen but do not speak or respond.
SEC nowadays is very active in taking enforcement actions against cryptocurrencies and any activities in relation thereto.
The latest action taken by SEC was against a newly NASDAQ listed crypto entity, Coinbase. The enforcement action by SEC against Coinbase has been criticized by most of people. People are claiming that SEC has lost its conscious mind and is overstretching its authority and power. SEC claimed that Coinbase is not legally authorized to launch any lending program because the program involves “securities”.
According to Coinbase, the firm was in the process of launching the proposed lending scheme before the end of October, 2021. However, the firm was issued a legal notice by SEC informing the company to refrain from launching the proposed program. In the notice, SEC alleged that the proposed program is likely to get involved “securities”, hence, needs to be suspended. SEC then advised Coinbase that if the program is not suspended then legal action will be taken against it. But the firm till to date hasn’t responded to SEC’s notice. Instead, the firm’s officials discussed the matter on Twitter. They claimed that they were surprised to receive such an uncalled for notice from SEC. SEC has made a final determination without affording any opportunity to the firm and without mentioning any reasons.
SEC’s action was later on criticized by global crypto community as being misuse of its power. This then gave the opportunity to Ripple Labs to raise criticism against SEC’s action. The criticism came directly from Brad Garlinghouse, the CEO of Ripple Labs. He commented that it isn’t surprising at all that Coinbase has become the latest target of SEC. SEC is using the tactics of ‘lawfare’ which is different from the warfare as it includes molding the law to dominate adversaries. He then suggested that it is useless to come to terms with SEC and its officials. If table-talks would have been the solution to settle dispute with SEC, then XRP’s dispute wouldn’t have lingered on for three years.
Persons who are aware with the Ripple’s dispute with SEC are suggesting that SEC is going after Coinbase as it did with Ripple Labs. Stuart Alderoty, Ripple’s counsel, stated that SEC should stop using intimidation tactics or else consumers would suffer.