Pro-Ripple Lawyers Say Ethereum Still Has Regulatory Uncertainty Issues  

Ripple CLO Stuart Alderoty and pro-XRP lawyer Bill Morgan still believe the SEC’s decision to end an investigation into Ethereum 2.0 does not absolve ETH of regulatory uncertainty. 

Both legal experts expressed this view shortly after Ethereum developer Consensys Inc. revealed that the SEC does not recommend an enforcement action based on its investigations into certain sales of ETH. 

Ripple CLO Highlights Regulatory Uncertainty Surrounding Ethereum 

Reacting, the Ripple CLO congratulated Consensys on the win but raised concerns about the uncertainty regarding ETH’s regulatory status.

He quizzed whether the conclusion of the Ethereum 2.0 investigation indicates the SEC does not think Consensys offered ETH as a security. Additionally, he suggested that the SEC might still view ETH as a security. 

Furthermore, Alderoty questioned SEC chair Gary Gensler’s potential response regarding ETH’s regulatory status. Lastly, the Ripple CLO noted that the regulatory status of Metamask’s staking and swap services could be in question due to the SEC’s refusal to address the matter in its recent response.  

He expressed frustration with the lack of clear regulatory guidance for the U.S. crypto industry, which could hinder innovation in the country. 

A big win for Consensys, though questions remain. Does this mean the SEC thinks Consensys’ offers and sales of ETH are not securities transactions and/or that ETH itself is not a security? What will Gensler say if now asked? What is the status of MetaMask and staking?

This is…

— Stuart Alderoty (@s_alderoty) June 19, 2024

Pro-Ripple Lawyer Reacts 

Pro-XRP lawyer Bill Morgan echoed a similar sentiment, suggesting that the SEC’s decision not to pursue enforcement action following its Ethereum 2.0 investigation fails to clarify the regulatory status of the second-biggest crypto by market cap. 

He contrasted the regulatory ambiguity surrounding ETH with the legal clarity XRP received from a federal judge last year, raising a rhetorical question about which situation is preferable. 

Come on people. Would you prefer a letter like this sent to one company, or a finding from a judge that a token itself is not a security.

Gensler will continue not to answer when asked whether Ethereum is a security. He can’t do that with XRP. pic.twitter.com/kPbeirslFE

— bill morgan (@Belisarius2020) June 19, 2024

Furthermore, the lawyer speculated that Gensler would continue to refrain from answering whether ETH is a security but cannot do so with XRP. This is because U.S. District Judge Analisa Torres held that XRP in itself is not a security.  

Fight Continues 

Though the SEC has ended investigations into Ethereum 2.0, Consensys is still embroiled in a lawsuit against the securities regulator. The Ethereum developer filed the suit in April, requesting a Texas court to declare the staking and swap services offered on Metamask as non-securities. 

Since the SEC did not comment on the status of Metamask’s staking and swap services, Consensys stated that its legal fight with the regulator would continue.