CT Exclusive: Ripple CTO gives US authorities bad marks for crypto regulation
“Don’t let yourself be left out!” Ripple CTO David Schwartz calls on the American authorities to take other countries as an example.
David Schwartz, the Technical Director (CTO) of Ripple Labs, is confident that the strict regulation of the American government agencies for established cryptocurrencies such as XRP will ultimately be an advantage, but he sees it as a considerable disadvantage for new crypto projects.
In an exclusive interview with Cointelegraph, the Ripple CTO fears that American crypto companies and blockchain companies are already thinking about moving abroad. He sees “the overlapping jurisdiction” of the various supervisory authorities as one of the big problems in the USA, because the SEC, the supervisory authority for derivatives trading (CFTC) and the authority to combat financial crime (FinCEN) have not yet reached a consensus agreed on the treatment of cryptocurrencies, but each drive their own strategy.
“It is very difficult for crypto companies to understand which laws apply and how they are to be applied to innovative innovations,” as Schwartz states. To this end, he adds: “There is no such situation in most other countries, because there is usually a competent authority that sets all regulatory requirements and makes all decisions so that you always know who to turn to.”
The Ripple boss continues:
“In addition, the US is one of the few countries where there is a very real risk that the regulators will arrive at some point and say: ‘What you have been doing in public and unmolested for five years is actually illegal, and you should have known that! ‘”
The swipe at the American regulatory system is probably no coincidence, because Ripple is currently in a massive legal dispute with the US Securities and Exchange Commission, which filed charges against the blockchain payment service provider in December 2020. Above all, CEO Brad Garlinghouse and co-founder Chris Larsen are held responsible for the fact that the release of the company’s own crypto currency XRP allegedly constitutes an “unlawful sale of securities”. CTO Schwartz states that he had repeatedly warned his company of a sudden blow from the authorities, because every company in the crypto industry would be exposed to the sheer arbitrariness of the regulators due to the current legal situation.
“If we pass a regulation that nips innovation in the bud, and at the same time we give established projects a free pass, then we make competition all the more difficult for new projects,” Schwartz continues. And further: “This is great for XRP, but for me as a person who wants the best possible solutions for our world, this is not a good approach.”