Ripple to Explore IPO Outside United States Due to ‘Hostile SEC’

In the wake of Coinbase’s groundbreaking move to become the first crypto-native company to go public in the United States, blockchain payments giant Ripple is charting its course toward an initial public offering (IPO).

Despite the industry’s positive momentum, Ripple’s CEO Brad Garlinghouse said in an interview with CNBC at the World Economic Forum in Davos, Switzerland, that the company has opted to explore IPO opportunities outside the United States due to the perceived hostility of the US Securities and Exchange Commission (SEC) towards the flourishing digital asset sector.

Going for an IPO Is Not an Immediate Priority for Ripple

Garlinghouse said that Ripple has no time frame yet for the planned IPO. He clarified that the IPO will not be “anytime soon” as the company is still exploring other markets and looking for a more conducive environment for its public listing.

The Ripple CEO told CNBC that the blockchain payment firm has its eyes on other jurisdictions with a clear regulatory framework for crypto. However, going public is “not an immediate term priority” for the firm.

Garlinghouse pointed to the recent SEC lawsuit against Coinbase, despite the SEC previously approving its S-1 application to go public, as a cautionary example.

He expressed concerns about facing a hostile regulator in the United States and emphasized the importance of finding a conducive market for Ripple’s public listing.

“In the United States, trying to go public with a very hostile regulator that’s approved your S-1, that doesn’t sound like a lot of fun to me. Coinbase obviously had their S-1 approved. And now the SEC is suing them for doing the things outlined in their S-1,” Garlinghouse said.

Ripple vs SEC Case Nears Its End

Ripple first hinted at the possibility of going public in 2022. At the time, Garlinghouse said the company would make the move after it concluded its ongoing court battle with the SEC.

The financial watchdog sued Ripple and two of its executives, including the CEO, in 2020 after the blockchain payment firm conducted its initial coin offering (ICO), citing unregistered securities and violations of federal laws.

In 2023, the court declared XRP, Ripple’s payment token, as non-security, ruling in favor of the company. The case is currently nearing its end. Last week, the SEC filed another motion asking the court to compel Ripple to provide its financial records and sales contacts from when it conducted the ICO in 2020.

The move is part of the SEC’s effort to determine whether programmatic sales of XRP can be classified as securities.

In June last year, when US judge Analisa Torres handed down her summary judgment in the case, partially siding with Ripple, the court agreed that institutional sales of XRP are not a security, but programmatic sales are not. Programmatic sales are transactions executed on centralized exchanges such as Coinbase, Binance, and Kraken.

Garlinghouse criticized SEC Chief Gary Gensler, calling him a “political liability” due to the regulator’s enforcement actions against the emerging crypto economy. The Ripple boss claimed Gensler was not acting in the best interest of the American citizens.

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2024-01-18 13:10