Ripple CEO Says XRP And ETH Not Securities Amidst Accusations
Brad Garlinghouse, the CEO of Ripple, recently defended the status of Ethereum (ETH) and Ripple (XRP) amidst growing regulatory scrutiny. Speaking at the XRP Las Vegas 2024 event, Garlinghouse criticized the U.S. Securities and Exchange Commission’s (SEC) handling of cryptocurrency regulation, particularly its approach to Ethereum and Ripple.
During a fireside chat moderated by Michael Arrington, founder of Arrington Capital, Garlinghouse responded to comments made by MicroStrategy CEO Michael Saylor, who has labeled ETH and other major cryptocurrencies as unregistered securities. Contrasting Saylor’s views, Garlinghouse, who has consistently supported Ethereum, highlighted Ripple’s legal victory where a judge ruled that XRP was not a security.
In a tweet captured by pro-crypto journalist Eleanor Terrett, Garlinghouse went further by openly criticizing SEC Chair Gary Gensler, describing him as an “immoral human being” for overreaching in his regulatory duties. This bold statement reflects the ongoing tension between the cryptocurrency industry and regulatory authorities.
Legal Battles and the Status of Ethereum
The debate over whether Ethereum should be classified as a security has intensified. Consensys Inc., a key player in Ethereum’s development, has taken legal action against the SEC in Texas, accusing the regulator of overstepping its jurisdiction. The lawsuit argues that Ethereum does not fall under SEC’s regulatory scope, reinforcing the stance that ETH should not be treated as a security.
This legal contention traces back to a pivotal 2020 case in which the SEC deemed XRP a security. Ripple contested this decision, leading to a favorable ruling from a federal judge stating that although XRP is not a security, Ripple had breached legal requirements in its initial dealings with institutional customers.
Impact on Ethereum ETF and Regulatory Future
The ongoing SEC investigation into Ethereum-related trades is also delaying the approval of an Ethereum Exchange-Traded Fund (ETF). Such an ETF would allow investors to buy Ethereum directly through the stock exchange, a development eagerly anticipated by the investment community.
The regulatory landscape is further complicated by previous SEC statements, such as those by William Hinman, former head of the SEC’s Corporation Finance division, who previously noted that Ethereum was not considered a security. These conflicting views contribute to the current regulatory dilemma facing both the SEC and cryptocurrency advocates.
The controversy surrounding the classification of cryptocurrencies like ETH and XRP as securities remains a critical issue. Garlinghouse’s recent remarks underscore the broader industry’s frustration with the SEC’s approach, which many see as inconsistent and overly aggressive. As legal battles continue and new developments emerge, the cryptocurrency community remains vigilant, watching how these decisions will shape the future of crypto in the financial sector. The outcome of these disputes will likely have significant implications for the regulatory treatment of cryptocurrencies. Moreover, the outcomes could also affect their integration into the broader financial system.
