“Confounding” regulations in the U.S. will push more crypto companies to leave the U.S. as companies like Ripple look to hire and invest outside the country, the CEO of blockchain services company Ripple told CNBC in an exclusive interview.
“Europe has really given leadership and countries like the United Arab Emirates … the growth you’re seeing … even the UK and Singapore – they’re giving clarity on how they’re going to regulate these digital assets,” Ripple CEO Brad Garlinghouse said on Thursday.
“And it allows through the rules of the road that allow entrepreneurs, investors to engage constructively with regulators,” Garlinghouse said on CNBC’s “Squawk Box Asia.”
“Frankly, that’s why you see entrepreneurship and investment flowing into other jurisdictions – and certainly Europe has been a significant beneficiary of the confusion that’s been in the US,” he added.
His comments come after the crypto firm made the announcement on Wednesday had bought Metaco, a Swiss crypto custodial services companyat a time when US regulators are cracking down on companies like Ripple and the crypto exchange Coinbase.
I think it’s fair to say that the US has made it as confusing as possible regarding the rules of the road for the crypto industry. The SEC has certainly been at the forefront of that confusion.
The Metaco acquisition is expected to expand Ripple’s product line and give it access to an attractive clientele that includes Citi and BNP Paribas.
“We think Metaco is a perfect fit from where we’re trying to grow our customers today,” says Garlinghouse.
Crypto companies have threatened to leave the US in an attempt to send a signal to regulators that the country may be missing out on an important technological innovation.
Ripple is fighting a lawsuit from the US Securities and Exchange Commission. The SEC has accused Ripple, Garlinghouse and company co-founder Chris Larsen of violating securities laws by selling XRP without first registering it with the SEC. XRP is the original cryptocurrency on the Ripple network.
Unfortunately, (the crackdown) has encouraged companies like Ripple to invest more outside the US
“Unfortunately, it has encouraged companies like Ripple to invest more outside the US,” Garlinghouse said, adding that 95% of Ripple’s customers are non-US and most of Ripple’s hiring this year will be outside the US.
Garlinghouse said Ripple is in a good financial position. Ripple financed the Metaco purchase with $250 million in cash from its own balance sheetaccording to him.
“Ripple has a very strong balance sheet and we lean in and play offense and this is just an example of that,” Garlinghouse said.
“Be greedy when others are fearful and be fearful when others are greedy,” he said, quoting billionaire investor Warren Buffett.
On Ripple’s listing plans, Garlinghouse said it is “in no rush to list” and “not in need of raising more capital.”
“So if we were to consider (listing), it would be at a time and place that made sense. We wouldn’t want to do it if we didn’t feel like it actually improves the ability to grow the business, the customer experience,” he added.