Chris Larsen, the co-founder and executive chairman of Ripple Labs, has lambasted the Biden administration and the US Securities and Exchange Commission (SEC) for hurting the American crypto sector.
In an interview with Bloomberg, Larsen scathingly rebuked the approach to crypto policy taken by President Biden and the SEC chair Gary Gensler.
According to Larsen, US crypto policy in recent years has had a negative effect on the city of San Francisco, the home of Ripple Labs, which has long been a center of American innovation.
“This administration made a really bad call,” said Larsen, referring to the Biden presidency. “They pretty much killed San Francisco from being what it was—the blockchain capital of the world”
While Larsen thinks San Francisco’s blockchain sector has suffered, he said that other cities have stepped up to take its crown:
“We owned it and we don’t anymore because the Biden administration, for whatever reason, decided they wanted to push this industry offshore […] it’s London, Singapore, Dubai that are the global capitals of blockchain now.”
While federal crypto policy may have hampered US firms’ ability to grow, Ripple Labs has made headlines for its clashes with the SEC.
Under Gensler’s leadership, Larsen accused the SEC of “engaging in regulation-by-enforcement,” rather than laying out a clear rulebook for crypto firms to follow.
In a personal dig at Gensler, Ripple founder said “he just likes that lack of clarity so that he can go after anybody and make up the rules as he goes along.”
As such, Larsen said it has been left to the courts to create clarity for the sector.
The good news, he observed, is that case-by-case, judges are reigning in the SEC’s overreach and establishing a path forward for the US crypto sector.
For example, in Ripple Labs’ clash with the regulator, in July, a New York judge ruled that listing XRP tokens on exchanges does not constitute an investment contract.
Although Larsen acknowledged that the SEC may still appeal the decision, he characterized the decision as a victory for Ripple nonetheless.
Discussing another recent court case in which the SEC was ordered to reconsider Grayscale’s Bitcoin ETF application, Larsen observed that “the judge really admonished the SEC” in ETC case.”
In her decision , Judge Neomi Rao called out the SEC for denying spot Bitcoin ETF applications while allowing exchanges to list crypto futures funds. As she noted, “the denial of Grayscale’s proposal was arbitrary and capricious because the Commission failed to explain its different treatment of similar products.”