2024-3-24 00:23 |
It recently came to light that the U.S. Securities and Exchange Commission (SEC) is looking to reclassify ether (ETH) as a security. However, Ripple CEO Brad Garlinghouse has forecasted that the regulator is poised to lose its war against Ethereum, just like it did with XRP.
SEC vs Ether: Garlinghouse Sees Loss For RegulatorThe Securities and Exchange Commission is reportedly waging war against Ethereum, which has huge implications for blockchain’s future. The move could also derail plans for a spot ETH exchange-traded fund (ETF).
As the battle unfolds, Ripple boss Brad Garlinghouse shares his bold forecast for ether. He predicted that the SEC would undoubtedly “lose the war against ETH just as they lost against XRP”.
Garlinghouse’s comments come as the SEC tries to classify ETH as a security. The Ethereum Foundation is also currently being investigated. As ZyCrypto previously reported, the nature of the government inquiry is still unknown.
Garlinghouse points out that the SEC’s decision to lodge lawsuit after lawsuit against cryptocurrency companies has resulted in major court losses. He noted that the SEC is now also starting fights with other regulators like the Commodity Futures Trading Commission (CFTC). As a result, the Gary Gensler-helmed agency is now “lagging behind its foreign counterparts”.
Notably, ether has never been named outright as a security token in any SEC enforcement action. However, shortly after Ethereum switched from proof-of-work (PoW) to a proof-of-stake (PoS) algorithm, Gensler remarked that PoS chains could be classified as securities.
Ripple’s Wins Against SECOne thing XRP has going for it is that, unlike most digital assets in the market, there is some regulatory clarity surrounding that asset after a judge ruled in July 2023 that XRP itself is not a security and Ripple’s sales of the token via exchanges are not securities transactions. The judge, however, declared that programmatic XRP sales to institutional customers were investment contracts.
The SEC later voluntarily dropped charges against Garlinghouse and Ripple chairman Chris Larsen. Now, the protracted legal fight between Ripple and the SEC is heading into the homestretch, with a trial expected to commence in April.
The likely outcome of the SEC going after ETH is another significant loss for the regulator in court. The agency already tacitly indicated that ether was a commodity after it allowed the listing of US-based ETH futures and ETH futures ETFs.
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