Despite the Securities and Exchange Commission’s lawsuit, Ripple not just surviving but thriving in the key Asia-Pacific region, according to CEO Brad Garlinghouse.
In a March 5 interview with Reuters, Garlinghouse said “it has not really impacted what’s going on for us in Asia Pacific.”
That’s not the case in America, Garlinghouse admitted. Most of the major exchanges in the U.S. have suspended trading of XRP, the cryptocurrency that that is the lifeblood of its On-Demand Liquidity (ODL) international payments network, for fear of running afoul of the regulator. And last month MoneyGram, a high-profile RippleNet user, suspended its ODL activity.
The U.S. SEC has sued Ripple, Garlinghouse, and Ripple executive chairman Chris Larsen, arguing that XRP is an unregistered security that they and the company have been selling illegally for some seven years. Ripple, which owns about 55 billion of XRP’s 100 billion tokens, has made $1.38 billion from those sales, while Garlinghouse and Larsen have made $600 million the enforcement agency alleges in its lawsuit. It asks the Federal District Court of the Southern District of New York to make all three “disgorge all ill-gotten gains” and impose fines.
But outside the U.S., Ripple has “been able to continue to grow the business in Asia and Japan because we’ve had regulatory clarity in those markets,” Garlinghouse added. “We’re seeing the activity of XRP liquidity has grown outside the United States and continue to grow in Asia, certainly in Japan.”
It has actually signed up 15 new banks as clients since the SEC lawsuit was filed on Dec. 22, he told Reuters.
The company—and much of the cryptocurrency industry—has long complained that the agency has been far too opaque in making clear when and why a digital asset is or is not a security. Garlinghouse repeated that, telling Reuters that regulatory uncertainty a “hinderance” to innovation.
Well before the lawsuit was filed, Larsen said the company was thinking about leaving the U.S. altogether, citing regulatory uncertainty, although it never followed through. On Feb. 21, Ripple registered a company in Wyoming, which has aggressively courted blockchain and crypto businesses, in part with clear regulation.
XRP’s price crashed when the SEC suit was filed, dropping from around $0.50 to below $0.20. While it has rebounded to its current $0.46, the cryptocurrency dropped from No. 3 by market capitalization to No. 7. It lost ground to stablecoin Tether (USDT), as well as Cardano (ADA), Binance Coin (BNB), and Polkadot (DOT)—all three swept ahead by the roaring decentralized finance, or DeFi, market.