Ripple CEO challenges SEC over Ethereum status

Garlinghouse's remarks reflect broader concerns in crypto industry about regulatory clarity

The US Securities and Exchange Commission (SEC) faces criticism from Ripple’s CEO, Brad Garlinghouse, and other industry figures over its approach toward Ethereum.

Garlinghouse expressed his belief on social media that the SEC is likely to fail in its attempts to classify Ethereum as a security, similar to its outcome with XRP.

The SEC has been seeking to label Ethereum as a security, which would result in stricter regulations for the cryptocurrency.

This move has prompted backlash from industry leaders, including Paul Grewal, chief legal officer at Coinbase, who emphasized Ethereum's role in the crypto economy and its classification as a commodity by other regulatory bodies like the Commodity Futures Trading Commission (CFTC).

Garlinghouse's remarks reflect broader concerns within the cryptocurrency industry regarding regulatory clarity and innovation-friendly regulations. He highlighted the SEC's ongoing legal battles with crypto firms and suggested that the agency may be overreaching in its efforts to regulate Ethereum.

While the SEC has not officially declared Ethereum's status, its chairman, Gary Gensler, has hinted at the possibility of classifying most crypto tokens, excluding Bitcoin, as securities.

However, Ethereum's long-standing classification as a commodity by the CFTC and federal courts adds complexity to the debate.

Additionally, the recent endorsement by the SEC of nine exchange-traded funds (ETFs) monitoring Ether futures introduces intricacies into the scenario, hinting at a potential classification of Ethereum as a commodity.

However, the procedure for approving spot Ether ETFs encounters obstacles, as experts foresee potential rejections owing to limited interaction between the SEC and issuers.

Garlinghouse's comments echo sentiments shared by other industry leaders who fear that the SEC's actions could stifle innovation and create confusion in the market. The ongoing dispute over Ethereum's classification underscores the need for clear and consistent regulatory frameworks in the crypto space.

In the meantime, Brian Armstrong, CEO of Coinbase, recently emphasized the necessity of approving Ethereum ETFs, urging regulators to adhere to regulations and offer equitable treatment to cryptocurrencies.

Armstrong also pointed out the discrepancy between the SEC and the CFTC regarding Ethereum's categorization, implying that legal steps might be required to advance the matter.

Drawing comparisons to the legal dispute surrounding Bitcoin ETFs, Armstrong suggested that judicial intervention might be needed to compel regulators to ensure equitable treatment for Ethereum.

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Written by Silvia Pavlof

Silvia has explored various forms of writing, ranging from content creation for social media to crafting movie scripts. Drawing on her experience as a journalist specializing in the gambling sector, she is currently investigating the impact of cryptocurrencies and blockchain on traditional gambling and iGaming.

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