Brad Garlinghouse, the CEO of financial technology company Ripple Labs, has advised cryptocurrency startups to steer clear of the United States. Garlinghouse argues that the country’s lack of clear crypto regulations makes it one of the worst places to launch digital asset operations. Speaking at TOKEN2049, an annual crypto event hosted in Singapore, Garlinghouse emphasized the need for the U.S. to learn from countries like the U.K., Singapore, and the United Arab Emirates, which have implemented clear rules to encourage innovation and protect investors.
Avoiding the U.S.: A Warning to Crypto Startups
In addition to urging crypto startups against operating in the U.S., Garlinghouse placed blame on the U.S. Securities and Exchange Commission (SEC) for creating an unfavorable environment for the industry through its lawsuits. Over the course of this year, the SEC has filed lawsuits and imposed hefty settlements on various digital asset platforms, including Binance, Coinbase, and Kraken. These legal battles, combined with ongoing disputes involving Ripple Labs, have resulted in the SEC classifying many crypto tokens as securities and demanding registration.
Garlinghouse believes that the SEC’s lawsuit strategy is no longer effective, as the American judiciary system has begun to favor the crypto industry. Recent court victories by Ripple and Grayscale against the SEC serve as evidence for this shift. As Garlinghouse stated, “The only country I would not encourage you to start a company right now is in the U.S… I think you’re seeing the momentum shift. I think that it used to be that a lot of judges were like: ‘Well, the SEC is always right,’ and they weren’t fighting that, but I think you’re starting to see the pattern change.”
Ripple’s Focus on Offshore Regions
Hong Fang, the president of OKX, echoed Garlinghouse’s sentiments, advising crypto firms to focus on what they can control: building the right technology and product while supporting responsible regulation. Despite the recent court victories providing some clarity for the U.S. crypto industry, Ripple has decided to shift its focus to offshore regions. The company plans to hire 80% of its staff outside of the U.S. this year.
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