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Ex JP Morgan regulatory exec joins Ripple board

xrp ripple

Yesterday, Ripple appointed former JP Morgan (JPM) Chief Regulatory Affairs Officer, Sandie O’Connor, to its board of directors. There’s the ongoing question of whether XRP is a security. Combined with Ripple’s recent threat to move its U.S. headquarters overseas due to the lack of regulatory clarity, O’Connor will provide Ripple counsel on regulatory and governmental matters. 

Working for JPM for over 30 years, O’Connor has been celebrated multiple times as one of the Most Powerful Women in Banking and Finance in American Banker’s top 25 lists. In her most recent role, she established JPM’s regulatory strategy, engaged with G-20 regulators, and served multiple governance committees. She currently serves as a Systemic Resolution Advisory Committee Member of the Federal Deposits Insurance Corporation (FDIC) and is on a Financial Stability Task Force. 

“Her extensive network and in-depth understanding of markets, capital flows and banking will provide valuable and unique insights as new policies and regulations take shape across the U.S.,” said Ripple’s CEO Brad Garlinghouse. “The U.S. needs a single clear regulatory framework for crypto that levels the playing field and supports American innovation and companies.”

Is XRP a security?

Other cryptocurrencies such as Bitcoin and Ethereum have been deemed not to be securities because they are sufficiently decentralized. Three months ago, the XRP Ledger Foundation was created to support the functioning of the ledger independently of Ripple. We’d speculate that one of the motivations is to demonstrate that Ripple doesn’t control XRP.

O’Connor’s appointment comes at a crucial time as Ripple expresses frustration at the lack of regulatory certainty in the blockchain and cryptocurrency sector. At the October LA Blockchain Summit, Ripple’s Chairman and Co-Founder Chris Larsen threatened to re-locate Ripple’s U.S. headquarters to a more blockchain-friendly jurisdiction. He cited the U.S.’s regulatory hostility and mentioned financial hubs such as London, Switzerland, or Singapore as viable options. 

Larsen acknowledged that ICOs were a real problem in the early days but believes the world has moved on. “In the U.S., all things blockchain and digital currency started and ended with the SEC (Securities & Exchange Commission),” he said. “We are now in this tech cold war with China and instead of pivoting to encourage U.S. innovation to keep up, they’ve done the opposite. They gave Bitcoin and Etherum a pass, proof of work systems that benefit China weirdly, but everything else is still in limbo or worse, regulated through enforcement. The message there is blockchain digital currencies are not welcome in the U.S.”

However, Larsen also recognized the need to support legislators and called for the industry to come together. “We’ve got to change up here or we’re going to lose our leadership, stewardship of the global financial system, and that would be a tragedy for the U.S.,” he said.

In an interview with CNN earlier this month, Garlinghouse also called for regulatory clarity. “It’s holding back the whole industry,” he said. “In the earliest days of the internet here in the U.S., the U.S. led because there was regulatory clarity. The internet is the reason we have the Amazons and Googles here in the U.S. today. We can, I believe, have that with the blockchain and crypto-industry, but it requires that clarity, that certainty for investors to continue to invest.” 

Apart from pure regulatory matters, Ripple has also been embroiled in its fair share of legal issues. It is also currently facing a class action for failing to register XRP as a security.

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