Ripple CEO, Brad Garlinghouse, is showing his support for Ethereum amidst the SEC’s investigation into whether certain ETH transactions should be classified as securities. This endorsement 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 be eligible for spot exchange-traded funds (ETFs).
However, Garlinghouse disagrees with this assessment. During a fireside chat with Michael Arrington at the XRP Las Vegas 2024 event, he criticized the SEC for including both ETH and XRP in its scrutiny of securities. He went so far as to call SEC Chair, Gary Gensler, an “unethical human being.” These remarks were shared by journalist Eleanor Terret in an X post.
This is not the first time Garlinghouse has expressed his support for ETH. In March, he confidently 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 microscope. In 2020, the agency sued Ripple, declaring XRP a security. However, last year, a U.S. federal judge ruled that XRP is not a security and that Ripple had violated the law by offering and selling the coin to institutional clients.
The SEC has not explicitly classified Ethereum as a security. The agency is solely investigating whether certain ETH transactions qualify as investment contracts, a specific type of security. In response to this scrutiny, Consensys Inc., a prominent software development company founded by Ethereum co-founder Joseph Lubin, filed a lawsuit against the SEC, alleging 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, made by former director of the Corporation Finance division, William Hinman, affirming that ETH is not a security.
Currently, the focus is on how the SEC’s ongoing investigation will impact the potential approval of a spot-based Ethereum ETF this month.
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