Ripple CEO Brad Garlinghouse throws his weight behind Ethereum as the SEC intensifies its probe to determine whether certain ETH transactions qualify as securities.
Garlinghouse’s support comes after MicroStrategy CEO Michael Saylor characterized ETH as unregistered securities.
As reported earlier, Saylor stated that ETH, XRP, Solana (SOL), Binance Coin (BNB), and Cardano (ADA) constitute unregistered securities. According to Saylor, these assets will never have their spot exchange-traded funds (ETFs).
Ripple CEO Says ETH and XRP Aren’t Securities
However, Garlinghouse has a contrary opinion. Speaking in his fireside chat with Arrington Capital founder and partner Michael Arrington at the XRP Las Vegas 2024 event, Garlinghouse emphasized that the SEC was “grossly wrong” for involving both assets in its securities-related scrutiny.
The Ripple CEO fired shots at SEC chair Gary Gensler, describing him as an “unethical human being.” Pro-crypto journalist and Fox Business reporter Eleanor Terret shared Garlinghouse’s comment in an X post today.
This is not the first time that the Ripple CEO has voiced his support for ETH. In March, the Ripple executive asserted that the SEC would fail in its quest to label ETH security, the same way it lost against XRP.
Ongoing SEC Scrutiny Targeting ETH and XRP
For the uninitiated, both XRP and ETH are subject to the SEC’s regulatory scrutiny. In 2020, the agency labeled XRP a security in its lawsuit against Ripple.
However, it received major pushback last year when a U.S. federal judge declared that XRP is not a security. The judge also ruled that Ripple violated the law when it offered and sold the coin to institutional clients.
Nonetheless, the SEC has not explicitly deemed Ethereum a security. The regulatory agency is only investigating whether certain transactions involving ETH constitute investment contracts, a special type of security.
Responding to the SEC’s scrutiny, Consensys Inc., a prominent software development company founded by Ethereum co-founder Joseph Lubin, sued the regulator in a Texas court, citing regulatory overreach.
Consensys contended that the SEC aims to regulate ETH as a security despite the asset lacking securities characteristics. The company further bolstered its argument by referencing a previous statement from the SEC affirming that ETH is not a security and falls outside the SEC’s regulatory purview.
The characterization of Ethereum as a non-security was issued by William Hinman, former director of SEC’s Corporation Finance division.
In the meantime, the major focus is on how the SEC’s ongoing scrutiny would affect the agency’s potential approval of a spot-based Ethereum ETF this month.
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