Ripple CEO praises SEC’s new direction, and U.S. crypto regulation enters a reset mode

Ripple CEO Brad Garlinghouse publicly praised the regulatory direction shift promoted by Paul Atkins, the newly appointed chair of the U.S. Securities and Exchange Commission (SEC), on April 20, describing it as “a refreshing breath that helps people get their senses back.” Garlinghouse sees the SEC’s policy shift as a core driver behind improving sentiment in the U.S. crypto market.

Garlinghouse’s direct comparison of SEC’s old and new policies

On the X platform, Garlinghouse directly contrasted the governance styles of the two SEC chairpersons. He said, “By contrast, Paul Atkins is like a breath of fresh air. He is the model SEC leadership should be—focused on what truly matters: protecting investors and fostering innovation that helps investors and the market.”

He also criticized Gensler: “Under Gary Gensler’s leadership, the SEC has clearly lost its way. He has declared war on a technology. This is an illegal misuse of power… The courts made the same ruling.”

Atkins himself also criticized the agency’s past overreliance on enforcement actions in the crypto space last week, saying the market had faced years of trouble due to a lack of viable compliance paths.

Atkins’s regulatory framework: clarity, lighter compliance, and an innovation exemption

SEC chair Atkins has designated digital assets as “our top priority,” and has listed crypto policy as a major priority for 2026. On April 21, he outlined the direction in detail: reducing the burden of compliance, strengthening coordination with the U.S. Commodity Futures Trading Commission (CFTC), and introducing an upcoming “innovation exemption.”

The “innovation exemption” is intended to allow market participants to promote on-chain tokenized securities trading within a limited compliance framework, while providing a buffer period for long-term rulemaking—reflecting the SEC’s broader effort to keep regulation aligned with an evolving market infrastructure while maintaining investor protection.

Ripple v. SEC: a milestone for establishing XRP’s legal status

The historical context of this regulatory shift is closely tied to the final outcome of Ripple v. SEC. The case was filed in December 2020 and was concluded in August 2025. The court ruling established the legal distinction between XRP sales by the company and XRP trading in the public markets: programmed XRP sales on exchanges do not constitute securities transactions, while direct institutional sales violate securities laws. Ripple ultimately faced a $125 million penalty, which was later further reduced to $50 million (far below the $2 billion the SEC initially sought); both sides withdrew their appeals to formally end the case.

Frequently Asked Questions

What link is there between Atkins’s SEC chair term and Garlinghouse’s assessment?

Atkins’s policy focus has shifted from enforcement to legislation, emphasizing providing a clear compliance path for the crypto industry. This closely aligns with what Ripple argued during the lawsuit—that crypto regulation should be based on rules that market participants can understand and follow. Garlinghouse’s praise is both an assessment of his personal leadership style and a reflection of the industry’s overall expectations for a more predictable regulatory framework.

What exactly are the “innovation exemption” measures in the SEC’s plans?

The “innovation exemption” is a mechanism the SEC plans to roll out, allowing market participants to test and promote on-chain tokenized securities trading within a limited compliance framework, while the SEC simultaneously develops longer-term formal rules. The measure is designed to prevent compliance innovations from getting stuck during the rulemaking process, and is one of the concrete implementations of the SEC’s policy shift.

What far-reaching impact does the final outcome of Ripple v. SEC have on the crypto industry?

The court ruling established a legal precedent that “exchange token transactions do not automatically constitute securities transactions.” It directly undermined the SEC’s position of categorizing all token transactions as securities under the “Howey Test,” providing an important legal foundation for subsequent crypto regulatory frameworks. The industry views it as one of the key catalysts driving the SEC’s policy shift.