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Speaker 1: Bloomberg Audio Studios, podcasts, radio news, and we're.

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Speaker 2: Going to discuss the companies that have tangled with the SEC,

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Speaker 2: with one major company now, Ripple CEO Brad Garlinghouse, joins

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Speaker 2: us here in studio. It's worth kind of going back

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Speaker 2: to your case with the SEC first, because you are

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Speaker 2: far along and as we sit here today on February twentieth,

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Speaker 2: how would you describe how the dispute has changed.

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Speaker 1: We look, I think for whatever reason, the SEC decided

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Speaker 1: to make Ripple their first major case around this, and look,

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Speaker 1: the reality. Prior to the case, we had been advocating

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Speaker 1: for more clarity around the rules and regulations. And the

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Speaker 1: good news has been other countries around the world have

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Speaker 1: leaned into that and codified what should the rules and regulations,

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Speaker 1: what's unique about crypto that needs to be changed. The SEC, frankly,

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Speaker 1: has just hired more litigation that you know what we

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Speaker 1: call regulation through enforcement, and it really just started suing

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Speaker 1: lots of people. And what's unfortunate is they have lost consistently.

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Speaker 1: They lost the Ripple case on everything they cared about.

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Speaker 1: I mean even the SoundBite you just had up your chair.

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Speaker 1: Genzler is saying that a lot of these are securities.

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Speaker 1: What the courts have said and the cases they have brought,

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Speaker 1: and certainly the case with Ripple and the token XRP,

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Speaker 1: the court determined that XRP is not in and of

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Speaker 1: itself as security.

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Speaker 2: When do you think that this will finally no longer

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Speaker 2: be an overhang for you?

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Speaker 3: Guys?

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Speaker 2: You're one of many companies that are fighting the SEC

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Speaker 2: at this point in time, But when can you call

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Speaker 2: this an arc all clear? And do you think that

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Speaker 2: this will make it so far as to reach higher courts?

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Speaker 1: Well, I hard to predict whether it's going to reach

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Speaker 1: our courts. On everything we cared about we won against

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Speaker 1: the SEC. Will the SEC appeal and move it up?

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Speaker 1: The courts will see they sought approval to do what's

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Speaker 1: called an interlocatory appeal. The courts denied that. Also, the

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Speaker 1: case against me personally and Chris Larsen personally was dismissed

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Speaker 1: entirely with prejudice. So look, from my point of view,

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Speaker 1: the SEC has lost consistently the Gray Scale case. I

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Speaker 1: think if you're following the Coinbase case that the tone

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Speaker 1: from the judge as I think, pretty skeptical about some

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Speaker 1: of the SEC's arguments. It stops. I think when the

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Speaker 1: SEC either realizes they're losing consistently consistently, or you have

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Speaker 1: Congress lean in and writes new legislation. That's probably going

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Speaker 1: to be hard in election year. Maybe we'll see legislation

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Speaker 1: around stable coins this year, but I'm hopeful and we'll

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Speaker 1: continue to advocate in Washington.

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Speaker 3: Well, you mentioned the grayscale case, Brad, and it's Kaille

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Speaker 3: in Washington. Obviously that was pretty instrumental, and ultimately the

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Speaker 3: SEC granting approval to not just gray scales conversion to

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Speaker 3: a spot ETF GBTC that is, but spot bitcoin ETF's

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Speaker 3: more broadly, I'm sure you've seen there's buzz out there

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Speaker 3: about potentially an XRP ETF being in the future. What

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Speaker 3: do you make of that speculation.

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Speaker 1: Well, Kayley, good to see you. I think it only

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Speaker 1: makes sense there will be other ETFs too. It's a

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Speaker 1: little like, you know, the earliest days of the stock market.

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Speaker 1: You don't really want exposure to one stock or one company.

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Speaker 1: You want to typically think about diversifying risk and what

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Speaker 1: have you. And so I think we will see other

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Speaker 1: ETFs when we will see them as hard to predict,

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Speaker 1: you know, the sad reality of what we saw with

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Speaker 1: the Bitcoin ETF is it was only because the courts

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Speaker 1: forced the SEC's hand and really Chair Gensler's hand, that

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Speaker 1: we saw that finally come to fruition. And look, in

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Speaker 1: my opinion, it makes these markets safer, it makes them

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Speaker 1: more robust, and so this is good for the investment

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Speaker 1: community to kind of lean into that.

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Speaker 3: So you would welcome an XRP ETF, then.

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Speaker 1: We would certainly welcome it. And I think it's inevitable

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Speaker 1: that they'll be, you know, a multiple ETFs around different tokens.

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Speaker 1: I think you'll even see ets potentially around baskets. That also,

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Speaker 1: I think further diversify that risk.

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Speaker 2: Given there's so much excitement around the ETF dynamic. Here

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Speaker 2: are you in talks with the largest issuers, particularly black

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Speaker 2: Arc to get this done?

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Speaker 1: Well, well, I'm not going to comment on that. I

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Speaker 1: know black Rock has said some things publicly. You know,

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Speaker 1: we think it makes sense for the XRP community overall.

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Speaker 1: Ripple obviously is a very important stakeholder in the XRP ecosystem,

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Speaker 1: but we're not the only player. And like we've seen,

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Speaker 1: i mean before the SEC lawsuit, XRP was the second

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Speaker 1: most valuable digital asset. I think because of the headwinds

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Speaker 1: of that lawsuit, you know, we've now seen that largely abate.

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Speaker 1: But the long term view on these things is about,

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Speaker 1: you know, how do you create utility and really solve

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Speaker 1: real world problems with these different digital assets. Bitcoin's doing

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Speaker 1: that very well as a store of value XRP, and

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Speaker 1: its dynamics surrounding very fast, very efficient, and low cost

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Speaker 1: on a per transaction basis makes it ideal for payments,

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Speaker 1: and that's where Ripple really has leaned into as a company.

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Speaker 3: Well, let's talk about where else Ripple is leaning in.

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Speaker 3: You've recently acquired Standard Custody. What is that going to

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Speaker 3: do for your company?

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Speaker 1: Well, we think there's some basic building blocks around crypto

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Speaker 1: that are important to make cryptos successful. Custody is an

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Speaker 1: important part of that. For institutions to be able to

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Speaker 1: custody both their own as well as their customers digital assets,

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Speaker 1: we think is very important. We've made two acquisitions over

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Speaker 1: the last year in this space. One was a company

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Speaker 1: in Switzerland and then more recently the Standard Custody. Standard

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Speaker 1: Custody and particularly has a trust license here in New York,

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Speaker 1: which also makes it very valuable. Everything we have done

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Speaker 1: at Ripple is compliant first, and I think this year

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Speaker 1: twenty twenty four, with FTX behind us, with some of

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Speaker 1: the binance dynamics largely behind us, I think has to

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Speaker 1: be a compliant first mindset for all of the crypto industry.

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Speaker 2: How far can your foray into custody really go? You

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Speaker 2: think about what's happening with Coinbase and its role in

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Speaker 2: custody when it comes to these ETFs, how do you

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Speaker 2: envision your role in custody expanding over time?

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Speaker 1: Well, it's a pretty fragmented market today. Coinbase is a

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Speaker 1: player player. You have five or ten players that have

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Speaker 1: small pieces of market share. We already have signed up

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Speaker 1: with Ripple's custody solution and HSBC. We have BBVA a

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Speaker 1: leading partner of ours called Zodia, So you know, we

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Speaker 1: feel very good about the momentum. We have to kind

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Speaker 1: of the larger banking infrastructure, but we also intend to

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Speaker 1: compete at a more regional financial institutions as well as

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Speaker 1: with some corporates who are starting to look at custoding

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Speaker 1: their own crypto also, brad As we have.

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Speaker 3: This conversation with you, Nikki Haley, the Republican presidential candidate

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Speaker 3: is giving a state of the race speech in South

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Speaker 3: Carolina with that primary just days away. She says she's

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Speaker 3: not going anywhere, she has no plans to quit the race.

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Speaker 3: But just a few weeks ago on the show, Tim Draper,

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Speaker 3: of course, a pretty prominent bitcoin investor, was talking about

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Speaker 3: what kind of president she could be, what she could

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Speaker 3: do for innovation like digital assets, And I just wonder,

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Speaker 3: as Ripple is looking ahead to twenty twenty four, how

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Speaker 3: consequential do you think ultimately who's in the White House,

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Speaker 3: what the composition of Congress could look like as well

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Speaker 3: down the ballot will be in deciding the future of

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Speaker 3: digital assets? Is there anyone you would support?

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Speaker 1: Well the most macro level, I think it's incredibly important

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Speaker 1: that the US regain a leadership position around crypto regulation.

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Speaker 1: We we are a laggered We are behind other major

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Speaker 1: countries like the UK. I mean, the European Union as

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Speaker 1: a twenty seven country membership is ahead of us. That

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Speaker 1: they've gotten twenty seven countries to agree to things that

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Speaker 1: we as one country can't get our arms around. So

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Speaker 1: I think it's very important. You know, over twenty percent

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Speaker 1: of the US population already has direct or indirect exposure

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Speaker 1: to crypto, and so it only makes sense that it's

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Speaker 1: an issue. As you probably know, Ripple Andresen Horowitz and

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Speaker 1: coinbase put together a super pack and we've each put

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Speaker 1: twenty five million dollars behind it to support candidates that

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Speaker 1: are pro crypto and pro constructive regulation and engagement, really

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Speaker 1: being pro innovation but protecting consumers. At the same time,

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Speaker 1: I think that for a lot of politicians, crypto has

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Speaker 1: become a sound bite where they don't really understand how

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Speaker 1: crypto works and they say things that actually don't even

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Speaker 1: back up with facts. So you know, I do think

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Speaker 1: it's a it's a campaign issue. Ripple has leaned into that.

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Speaker 1: I personally, you know, my donations are bipartisan but certainly

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Speaker 1: pro crypto, and that'll continue to be the case. I'll

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Speaker 1: even highlight just today John Deeton, a very prominent pro

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Speaker 1: crypto guy, announced he's running against Elizabeth Warren. So I

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Speaker 1: think you're mastive when you continue to see that aid correct.

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Speaker 2: So with that said, also we know that Elizabeth Warren

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Speaker 2: is trying to make the crypto industries a regulation around

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Speaker 2: aml of laws and KYC laws more akin to that

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Speaker 2: of banking. Is this something a lot of the crypto

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Speaker 2: industry has been very upset about. Is this something you're

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Speaker 2: actively fighting?

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Speaker 1: Oh No. On the contrary, I mean I would actually

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Speaker 1: argue Elizabeth Warren has it wrong. I mean, if you

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Speaker 1: sign up on coinbase, you have to get KYC know

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Speaker 1: your customer, you have to go through a verification process

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Speaker 1: of providing your licenses, and they do that verification. And

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Speaker 1: as I said before, the vast, vast, vast majority of

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Speaker 1: people who are in the crypto industry are good actors

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Speaker 1: who want to play by the rules.

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Speaker 2: We need to know what.

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Speaker 1: Those rules are sometimes, but that KYC and AML are

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Speaker 1: not rules that are confusing, and I find that the

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Speaker 1: vast majority of the industry players are already leaning into that.

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Speaker 1: I think Elizabeth Warren wants us to believe that those

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Speaker 1: are things that somehow crypto is circumventing. But that's not

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Speaker 1: the real world.

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Speaker 3: All right. Brad garling House always great to have you

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Speaker 3: on the show. Thank you so much for joining us. Brad,

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Speaker 3: of course, is the CEO of Ripple