The US Securities and Exchange Commission (SEC) has intensified its examination of Ethereum, inadvertently rallying the cryptocurrency community against it.
Ripple CEO Brad Garlinghouse confidently stated that the SEC would ultimately lose its battle against Ethereum. In a post on March 22 on social media platform X (formerly Twitter), Garlinghouse highlighted that the financial watchdog failed in its classification attempt of his company’s XRP token and is likely to face a similar outcome in its efforts to classify ETH as security. He mentioned that the SEC is engaging in disputes with the industry and is experiencing significant losses in court battles. Additionally, they are currently in conflict with other regulators such as the CFTC, and are trailing behind international counterparts.
Echoing Garlinghouse’s sentiments, Ripple’s Chief Legal Officer Stuart Alderoty suggested that the US Congress should halt funding for this “insanity.”
SEC’s Investigation of Ethereum
Recent reports revealed that the SEC, led by Gary Gensler, is investigating entities associated with Ethereum, such as the Ethereum Foundation, in an attempt to classify ETH as a security. This move sparked significant backlash from both the crypto community and US legislators, who expressed concerns about the SEC’s aggressive stance toward the burgeoning industry.
Paul Grewal, Coinbase’s Chief Legal Officer, highlighted numerous instances where the SEC and its representatives have referred to Ethereum as a commodity. He pointed to statements from former high-ranking SEC official William Hinman, as well as congressional hearings and testimony from Gensler before his tenure as SEC chair, which indicated that the digital asset was not considered a security. Additionally, Grewal noted instances where SEC lawyers attempted to draw comparisons between ETH and BTC.
Community Sentiments and Ripple’s Support
Notably, Ripple executives’ endorsement of Ethereum comes as unexpected, given the historical friction between the XRP community and ETH. For years, XRP supporters have alleged that Ethereum received preferential treatment from the SEC due to its non-classification as a security by former SEC official Hinman, arguing that this contributed to Ethereum’s widespread adoption and subsequent development.
Moreover, past negative remarks about XRP from Ethereum co-founder Vitalik Buterin further fueled animosity between the two projects.
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