Ripple has temporarily halted its plans for an initial public offering (IPO) due to what is described as a 'hostile' regulatory environment in the United States. The delay is attributed to the ongoing legal battle with the US Securities and Exchange Commission (SEC).
IPO Plans Deferred amid US Regulatory Challenges
Ripple, the blockchain-based firm behind the cryptocurrency XRP, had previously expressed its intention to explore a public listing once the SEC lawsuit, initiated in 2020, concluded. However, the regulatory challenges faced by the company in the U.S. prompted it to explore alternative jurisdictions with clearer regulatory frameworks.
In an interview with CNBC at the World Economic Forum in Davos, Switzerland, Ripple's CEO, Brad Garlinghouse, highlighted the difficulties of going public in the US: "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." He pointed to the example of Coinbase, a US-based cryptocurrency exchange, which faced legal action from the SEC even after its S-1 filing was approved.
Ripple's CEO has been critical of the SEC's approach to regulating the cryptocurrency industry, describing SEC's Chair, Gary Gensler, as a "political liability." Garlinghouse suggested that Ripple might reconsider a US listing once there is a change in SEC leadership.
Ripple CEO calls U.S. SEC Chair Gary Gensler a 'political liability' over lawsuit https://t.co/W2zhKYmkaz
— CNBC (@CNBC) January 16, 2024
Share Buyback: Ripple Invests $1 Billion to Ensure Investor Liquidity
Despite the delay in IPO plans, Garlinghouse emphasized that the option remains open for Ripple: "We’ll evaluate again, as we have new regulators sitting at the United States SEC." He clarified that going public is not an immediate priority for the company, and it will be assessed over time.
In a move to provide liquidity to its investors, Ripple confirmed a share buyback program, repurchasing $1 billion worth of its stock. Garlinghouse expressed the importance of shareholder liquidity and noted that some investors have been with the company since its inception in 2012.
The cryptocurrency industry has witnessed increased regulatory scrutiny globally, with companies like Ripple navigating complex legal landscapes. As Ripple keeps its IPO plans on hold, the broader crypto market continues to evolve, with other firms, such as Circle, pursuing public listings amid a buoyant year for cryptocurrencies.
This article was written by Tareq Sikder at www.financemagnates.com.
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