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Ripple, the company behind the cryptocurrency XRP, has temporarily set aside its plans for an initial public offering (IPO) due to regulatory challenges, according to CEO Brad Garlinghouse. The company had earlier considered markets outside the U.S. for its IPO, citing a "hostile" regulatory environment within the country.
Exploring Alternatives Amid Ongoing SEC Lawsuit
In a conversation with CNBC at the World Economic Forum in Davos, Switzerland, Garlinghouse revealed that Ripple had actively explored opportunities in jurisdictions with clear regulatory frameworks as potential venues for a public listing.
According to CNBC, the decision to venture outside the U.S. was influenced by the ongoing legal battle with the U.S. Securities and Exchange Commission (SEC), a lawsuit initiated in 2020 that remains unresolved.
Garlinghouse expressed reservations about navigating the IPO process in the U.S., particularly with what he described as a "very hostile regulator" in the form of the SEC. He drew attention to the challenges faced by companies like Coinbase, whose S-1 had been approved by the SEC before facing legal action.
An S-1 is a crucial document filed with the SEC before an IPO, detailing a company's financial performance and potential risks for investors.
Critical Assessment of Regulatory Climate
The Ripple CEO has been vocal in his criticism of the SEC's handling of cryptocurrency industry regulation. He labeled SEC Chair Gary Gensler as a "political liability" and hinted at a potential reevaluation of Ripple's IPO plans under a new SEC leadership. Despite these considerations, Garlinghouse emphasized that going public is not an immediate priority for Ripple.
According to Coin Geek, Ripple made headlines with a significant move – repurchasing shareholder shares. Confirming the buyback, Garlinghouse disclosed that the company had repurchased $1 billion worth of its stock, a strategic move following a bullish year for cryptocurrencies, particularly Bitcoin, which saw a more than 150% surge in value.
While regulatory uncertainties persist, some crypto firms, like Circle, the company behind the stablecoin USDC, have taken a different path, filing for an initial public offering in the U.S. this month. The dynamic landscape reflects the evolving relationship between the crypto industry and regulatory bodies, setting the stage for strategic decisions in the near future.
Photo: Dylan Gillis/Unsplash
