Ripple CEO Brad Garlinghouse has revealed that Citibank terminated its long-standing banking relationship with him, citing his prominent involvement in the cryptocurrency industry.
At DC Fintech Week, Garlinghouse said the U.S.-based financial institution ended their 25-year partnership due to concerns over potential regulatory scrutiny tied to his influence in the crypto space.
Garlinghouse attributes De-banking to SEC pressure
Garlinghouse pointed to broader regulatory pressure from the U.S. Securities and Exchange Commission (SEC) as a critical factor in the decision. He claimed that Citibank’s move reflects a growing trend of U.S. banks distancing themselves from figures associated with cryptocurrency. According to Garlinghouse, Citibank informed him that his high profile in the sector could draw unwanted regulatory attention, prompting them to sever ties. The CEO was given five days to transfer his assets and find alternative banking services.
The Ripple executive has criticized the U.S. SEC’s approach to regulating the crypto industry. He accused the SEC, led by Chair Gary Gensler, of creating an atmosphere of fear and uncertainty for companies and individuals involved in cryptocurrency. Garlinghouse also expressed concerns that regulators advise banks to limit their interactions with the crypto world.
Criticism of U.S. regulatory approach
Garlinghouse did not shy away from criticizing the broader regulatory environment in the United States, calling out not just the SEC but also the U.S. Treasury Department and the Office of the Comptroller of the Currency (OCC). He accused these institutions of adopting a hostile stance toward crypto, making it difficult for industry participants to operate without facing legal or financial repercussions.
The CEO, who has publicly criticized the Biden administration’s handling of crypto regulations, remains hopeful that the situation could improve after the upcoming U.S. elections. He has previously described the administration’s crypto policies as unclear and counterproductive to the industry’s growth. Despite his criticism, Garlinghouse has avoided endorsing any specific political candidate.
Garlinghouse urges start-ups to move outside the U.S.
During his speech, Garlinghouse advised U.S.-based crypto start-ups to consider incorporating outside the country due to the uncertain regulatory environment. He referred to Ripple’s ongoing legal battle with the SEC as an example of the risks companies face when operating in the U.S. Garlinghouse also expressed confidence that XRP exchange-traded funds (ETFs) would eventually be introduced despite the challenges posed by regulators.
Garlinghouse defended Ripple co-founder Chris Larsen, who recently faced backlash for donating $10 million in XRP to Democratic presidential candidate Kamala Harris. Harris, who had been criticized for her vague stance on crypto, has since pledged to support the industry as part of her campaign to attract black male voters. On the other hand, Republican candidate Donald Trump has promised to foster crypto-friendly policies if elected. Speaking at the Bitcoin Conference 2024, Trump committed to making the U.S. a global leader in the crypto industry, competing with countries like China.