Key Points:
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- Ripple, the cryptocurrency firm behind XRP, considered an IPO outside the U.S. due to perceived regulatory hostility from the SEC.
- Despite initial plans, Ripple CEO Brad Garlinghouse revealed that the company has put its IPO on hold, opting to buy back $1 billion in shares instead.
- The decision to explore non-U.S. markets was driven by the desire for a regulatory environment with clearer guidelines for cryptocurrency companies.
- Garlinghouse criticized the SEC’s approach to the crypto industry, referring to SEC Chair Gary Gensler as a “political liability.”
- Ripple remains open to the possibility of an IPO, contingent on regulatory changes and the appointment of new SEC leadership.
- Shareholder liquidity is emphasized, with Ripple completing share buybacks to provide investors with an exit option after 11-and-a-half years.
In a strategic move driven by regulatory concerns, Ripple, the company behind the cryptocurrency XRP, contemplated an initial public offering (IPO) outside the U.S., citing a “hostile” stance from the U.S. Securities and Exchange Commission (SEC).
CEO Brad Garlinghouse, speaking at the World Economic Forum in Davos, Switzerland, revealed that while the plan was considered, it has currently been put on hold. The decision came as a response to the SEC’s regulatory actions, with Garlinghouse expressing reluctance to go public in the U.S. under what he perceives as an adversarial regulatory environment.
Garlinghouse, critical of the SEC’s handling of the crypto industry, specifically called SEC Chair Gary Gensler a “political liability.” He hinted at the possibility of reconsidering a U.S. listing once there is a change in SEC leadership. Despite the challenges, Garlinghouse affirmed that the option of an IPO remains open for evaluation, especially as new regulators take charge at the SEC.
In the meantime, Ripple has actively pursued alternative strategies. Rather than proceeding with an IPO, the company opted to buy back shares from its shareholders, amounting to a substantial $1 billion. This move aims to address shareholder liquidity, providing an exit option for investors who have been involved with Ripple since its inception in 2012.
The share buyback comes after a positive year for cryptocurrencies, with Bitcoin rallying over 150% in the past year, injecting confidence back into the crypto market.
While the IPO is currently not an immediate priority for Ripple, the company continues to monitor regulatory developments and evaluate its options. The crypto industry’s landscape remains dynamic, and Ripple remains adaptable, ready to reassess its stance as circumstances evolve.
