Brad Garlinghouse, the CEO of Ripple, disclosed that because of his popularity in the cryptocurrency field, he was recently cut off from a long-standing banking relationship. Speaking at DC Fintech Week in Washington, Garlinghouse said, “Individuals within the crypto industry are being de-banked. I personally have been de-banked.”
He underlined that this experience is indicative of a larger pattern affecting the cryptocurrency industry in the United States, as institutions are becoming more reluctant to keep their connections with crypto participants in the face of regulatory scrutiny.
CitiBank Cut Ties with Garlinghouse
Garlinghouse disclosed that Citigroup Inc., where he had been a customer for 25 years, recently cut ties with him. The bank gave him just five days to transfer his funds, citing the increased scrutiny that comes with banking prominent figures in the crypto space.
“They were super honest,” Garlinghouse said. “They told me, ‘Look, you are a notable person in crypto, and that means more scrutiny from federal regulators.'”
This incident ties into the ongoing challenges faced by crypto firms in maintaining banking relationships, as regulators have advised banks to limit their exposure to the industry.
Garlinghouse was critical of the Biden administration’s approach to crypto regulation, singling out SEC Chair Gary Gensler for leading what he called a “reign of terror” on the industry.
He also accused the U.S. Treasury Department and the Office of the Comptroller of the Currency (OCC) of being hostile to crypto businesses.
Garlinghouse Still Optimistic about the Future of Crypto in the U.S.
However, Garlinghouse expressed optimism about the future of crypto regulation in the U.S., saying that the 2024 presidential election could bring a positive shift in policy. “No matter what happens, we’re going to see a reset,” he noted, predicting that new appointments to agencies such as the SEC, Treasury, OCC, and CFTC would indicate the direction for crypto regulation in the coming years.
Despite his criticism, Garlinghouse remains hopeful, predicting that when the dust settles, the current regulatory environment will be seen as a “speed bump” for the industry. He also suggested that an exchange-traded fund (ETF) tied to XRP was “inevitable.”
Nevertheless, Garlinghouse advised crypto startups to incorporate outside the U.S. to avoid the regulatory uncertainty that Ripple faced. “I hate saying that,” he admitted, adding that while he is pro-U.S., the risks of being sued by regulators are too high.