Ripple CEO Brad Garlinghouse has expressed his support for Ethereum (ETH) amidst the Securities and Exchange Commission’s (SEC) investigation into whether certain ETH transactions should be classified as securities. This comes after MicroStrategy CEO Michael Saylor claimed that ETH, along with XRP, Solana (SOL), Binance Coin (BNB), and Cardano (ADA), are unregistered securities that will never have spot exchange-traded funds (ETFs).
In a fireside chat with Michael Arrington at the XRP Las Vegas 2024 event, Garlinghouse criticized the SEC for including ETH and XRP in its securities-related scrutiny, stating that the regulatory agency was “grossly wrong.” He also took a shot at SEC chair Gary Gensler, calling him an “unethical human being.” Garlinghouse’s comments were shared by journalist Eleanor Terret in an X post.
This is not the first time Garlinghouse has shown support for ETH. In March, he stated that the SEC would fail in its attempt to label ETH as a security, just as it did with XRP.
Both XRP and ETH have been under the SEC’s regulatory scrutiny. In 2020, the SEC sued Ripple, labeling XRP as a security. However, a U.S. federal judge ruled last year that XRP is not a security and that Ripple violated the law when it sold the coin to institutional clients.
Although the SEC has not explicitly classified Ethereum as a security, it is investigating whether certain transactions involving ETH qualify as investment contracts, a specific type of security. In response to the SEC’s scrutiny, Consensys Inc., a software development company founded by Ethereum co-founder Joseph Lubin, sued the regulator, claiming regulatory overreach.
Consensys argued that the SEC is attempting to regulate ETH as a security despite it lacking the characteristics of a security. The company cited a previous statement from the SEC, issued by former director of the Corporation Finance division William Hinman, affirming that ETH is not a security and falls outside the SEC’s regulatory scope.
Currently, the focus is on how the SEC’s ongoing investigation will impact the potential approval of a spot-based Ethereum ETF later this month.
Disclaimer: This article is for informational purposes only and should not be considered as financial advice. The author’s views may not necessarily reflect those of The Crypto Basic. It is recommended that readers conduct their own research before making any investment decisions, and The Crypto Basic is not liable for any financial losses incurred.