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Ripple Puts Hold on IPO Plans, Citing SEC Hostility 

Ripple is temporarily shelving its plans for an initial public offering (IPO) in the United States, according to CEO Brad Garlinghouse. The decision, he noted, stems from the challenges posed by a perceived unfriendly regulatory environment, particularly with the U.S. Securities and Exchange Commission (SEC). 

Back in 2022, Garlinghouse expressed his anticipation that Ripple would explore the possibility of a public listing once the legal dispute with the SEC, initiated in 2020, reached a resolution. The lawsuit remains an ongoing matter. 

Speaking at a recent global economic forum in Switzerland, Garlinghouse stated that Ripple is actively seeking jurisdictions with transparent regulations to navigate the complexities associated with going public. The CEO expressed reservations about the SEC’s actions, asserting that attempting to go public in the United States under the current regulatory climate would not be ideal. 

He contrasted Ripple’s situation with that of Coinbase, noting the regulatory challenges faced by the latter even after receiving SEC approval for its S-1 filing, a document submitted to the SEC before an IPO, outlining financial details and investment risks. Garlinghouse has been vocal in criticizing the SEC’s regulatory approach toward the cryptocurrency industry, going so far as to label SEC Chair Gary Gensler a political liability. He expressed optimism that a change in SEC leadership might pave the way for Ripple’s consideration of a U.S. listing. 

Despite these considerations, Garlinghouse emphasized that the option of an IPO remains open, subject to ongoing evaluation. However, he clarified that taking the company public is not an immediate priority for Ripple. 

Recent reports revealed that Ripple engaged in share buybacks, repurchasing $1 billion worth of its stock. Garlinghouse confirmed the move, noting that it was aimed at addressing shareholder liquidity concerns, especially for long-term investors who have been involved with Ripple since 2012. This buyback follows a robust year for cryptos, with Bitcoin experiencing a notable surge of more than 150%. 

In contrast to Ripple’s cautious approach, other crypto companies, such as Circle, the entity behind the stablecoin USDC, have recently filed for an IPO in the U.S., indicating diverse strategies within the industry. 

In the meantime, the recently approved Bitcoin Spot Exchange ETFs have seen a staggering $10 billion in trading volume during the first three days of operation, with funds managed by BlackRock and Grayscale Investments continuing to outpace rivals. Although Grayscale has been leading in terms of trading volumes, the company has seen significant withdrawals, losing more than $500 million since it began trading last week. 

The “regulation by enforcement” being done by the SEC is also a concern to other players such as Marathon Digital Holdings Inc. (NASDAQ: MARA) since it creates a fluid and uncertain environment for these companies. These companies would prefer clarity so that they can make long-term plans on the basis of stable regulations governing the industry. 

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