Ripple CEO, Brad Garlinghouse, has come forward to defend Ethereum against increased scrutiny from the U.S. Securities and Exchange Commission (SEC). Speaking at the XRP Las Vegas 2024 event, Garlinghouse criticized the SEC’s approach to both Ethereum and Ripple (XRP), stating that their repetitive stance is unproductive. The discussion took place during a fireside chat moderated by Michael Arrington, the founder of Arrington Capital.
The debate surrounding whether Ethereum should be classified as a security has intensified following comments made by MicroStrategy CEO, Michael Saylor, who labeled ETH and other major cryptocurrencies as unregistered securities. In contrast, Garlinghouse has consistently supported Ethereum, citing Ripple’s victory against the SEC when a judge ruled that XRP was not a security.
Garlinghouse’s statement, in which he criticized SEC chair Gary Gensler, was shared on Twitter by pro-crypto journalist Eleanor Terrett. He referred to Gensler as an “immoral human being” and accused him of overstepping his boundaries in his role at the SEC.
Meanwhile, Consensys Inc., a key development component of Ethereum, has filed a lawsuit against the SEC in Texas. The company argues that the SEC is overreaching its jurisdiction by attempting to regulate Ethereum as a security. Consensys supports its claim by highlighting that Ethereum is not subject to SEC regulations, as previously stated.
The legal battle stems from a 2020 case in which the SEC classified XRP as a security. Ripple disputed this ruling and went through a legal process, which ultimately resulted in a federal judge’s decision last year that XRP is not a security. However, Ripple was found to have violated the law by initially selling to institutional customers.
The SEC’s ongoing investigation is also impacting the approval of an Ethereum exchange-traded fund (ETF), which would allow investors to directly purchase Ethereum on the stock exchange. This decision is highly anticipated by investors, as it will shape Ethereum’s regulation and its role as a financial asset.
Former head of the SEC’s Corporation Finance division, William Hinman, previously stated that Ethereum was not considered a security, adding to the complexity of the current regulatory environment. This poses a dilemma for both the SEC and crypto supporters.