Ripple CEO Brad Garlinghouse said the crypto company will move to another country if it loses in its legal battle with the SEC.
Garlinghouse said he’s confident that Ripple will prevail against the federal regulator, which accused the company of failing to register roughly $1.4 billion in XRP tokens as securities.
“We think the law is on our side and the facts are on our side,” he told Protocol. But “we will move to another jurisdiction if we lose the case in the United States. We still have an immense business to build. Why do it in a regulatory jurisdiction that’s not going to be friendly towards us?”
The SEC declined to comment.
The case, which is expected to drag on until early next year, could have far-reaching implications for the crypto industry. The SEC, led by Chair Gary Gensler, has argued that many cryptocurrencies should be subject to the strict reporting and registration rules that apply to securities.
The crypto industry has pushed back on that argument. A Ripple victory would be a major boost to the industry.
“This isn't just important for Ripple,” Garlinghouse said. “This is important for the whole industry. There's no doubt that if the SEC doesn't win their case against us that that is good for crypto in the United States.”
But, he said, startups have a hard time in the United States where “we don’t have clear rules” and “they’re not consistently applied.”
“Entrepreneurs who are starting businesses today who ask me, I encourage them to look at markets like the U.K.,” Garlinghouse said. “Go start your company in London. Go to Singapore.”
Garlinghouse said the “economic development offices” of “more than one or two countries” that are looking to bring tech companies and entrepreneurs to their markets have reached out to Ripple about possible relocation.
“They look at what's happening in crypto, they understand something about Ripple, they’re aware of the lawsuit and they're like, ‘Hey, maybe we should talk,’” he said.
He declined to name the countries, but Garlinghouse cited the U.K., Singapore and Switzerland as countries that “are friendly towards crypto.”
Garlinghouse has expressed optimism that Ripple will prevail in the SEC legal battle and that the company would eventually go public — presumably in the U.S. In an interview with Protocol earlier this year, he noted that the U.S. “does have the most liquid, the most vibrant, the largest capital market in the world.”
Alex Johnson, author of the Fintech Takes newsletter, said moving to another country makes sense for Ripple since a big chunk of its business and “the vast majority of its recent growth have come outside the U.S.”
“There doesn’t seem to be, from my perspective, a super compelling reason for them to continue operating out of the U.S., win or lose,” he told Protocol.
Like other crypto companies, Ripple has felt the impact of the market downturn. The market value of XRP, the cryptocurrency used in Ripple’s payments ecosystem, has fallen about 60% this year, according to CoinMarketCap.
But Ripple is one of the crypto powerhouses that continues to expand in the face of crypto winter. Garlinghouse announced last month that the company was “hiring for hundreds of roles around the globe.”