Ripple CEO Brad Garlinghouse is confident that the U.S. Securities and Exchange Commission (SEC) will not succeed in classifying Ethereum (ETH) as a security, just as it did with XRP. In response to reports about the SEC’s legal battle to categorize Ethereum as a security, Garlinghouse pointed out the regulator’s history of losses in similar cases within the crypto industry. He also suggested that the SEC is now targeting disputes with other agencies, such as the U.S. Commodity Futures Trading Commission (CFTC). Garlinghouse compared the SEC’s unsuccessful efforts with XRP to its likely defeat in classifying ETH as a security. He made these remarks following comments from Coinbase’s Chief Legal Officer, Paul Grewal, who expressed support for Ethereum and argued against its classification as a security.
Garlinghouse’s support for Ethereum surprised many in the crypto community, considering the critical remarks made by Ethereum creator Vitalik Buterin towards XRP when the SEC filed a lawsuit against Ripple in 2020.
Ripple’s Chief Legal Officer, Stuart Alderoty, responded to Garlinghouse’s post on X, calling on the U.S. Congress to intervene in the ongoing regulatory issues and stop funding the SEC. Alderoty has been a vocal critic of the SEC’s actions and policies under Gary Gensler’s leadership. He recently criticized the SEC for misleading the court and abusing its power in the Debt Box case.
In contrast to the SEC’s position, Chairman of the Commodity Futures Trading Commission (CFTC), Rostin Behnam, testified before the House Committee on Agriculture, disputing the SEC’s classification of ETH as a security. Behnam also opposed Prometheum’s proposal to offer ETH custody services, stating that both Bitcoin and Ether are commodities.
If the SEC succeeds in classifying ETH as a security, it would reduce the chances of an Ethereum ETF being introduced in the near future. Crypto enthusiasts have been hopeful for the approval of an Ethereum ETF by the regulator this year, similar to the Bitcoin ETF approved in January. Previous predictions suggested that the approval could happen by May 2024. However, with the SEC’s efforts to subject ETH to its regulatory oversight, expectations for the launch of an Ethereum spot ETF in May are diminishing.