Brad Garlinghouse, Chief Executive Officer of Ripple, the leading enterprise blockchain and crypto solutions company, has hit back at the United States Securities and Exchange Commission (SEC) led by Gary Gensler on its latest standpoint on Ethereum (ETH).
According to people familiar with the matter, the Ripple CEO defended Vitalik Buterin’s Ethereum (ETH) coin which is the second-largest cryptocurrency by market capitalization in a new fireside chat with the founder of MessariCrypto, Ryan Selkis. He also revealed that Ethereum (ETH) is a part of his crypto portfolio alongside the Ripple digital token, XRP, and the leading cryptocurrency Bitcoin (BTC).
In a recent outcome, the SEC claims that Ether (ETH), the native token of the Ethereum blockchain, could be considered an unregistered security. Brad Garlinghouse counters this SEC’s rhetoric on Ethereum, citing that it contradicts the statement made in 2018 by William Hinman, former Director, Division of Corporation Finance at the SEC, regarding the widely traded coin.
Read Also: Brad Garlinghouse States Reason Why He Thinks Ripple Will Win XRP Lawsuit against the SEC
The Ripple CEO commented thus;
“I’m going to set the record straight. I personally own Bitcoin. I personally own Ethereum. I personally own XRP. I am long all of those digital assets and some others.
“By comparison, my attitude is: Bill Hinman as the Director of Corporate Finance, got in front of the world and gave a speech saying, ‘We think ETH was a security, and transitioned to a non-security because of a decentralization framework.’
“I looked at that and I remember sending an email internally at Ripple like, ‘Hey there, this is good news.’ XRP is a decentralized, open-source digital asset. Ripple, the company, only controls a very small percentage of the validators of the network The law doesn’t actually say what Bill Hinman says, but if that’s how the SEC is going to measure this, that’s good.”
Read Also: Senator Toomey Slams SEC Chair For Classifying Most Crypto as Security
The discussion of Ethereum (ETH) being an unregistered security comes after the largest smart contract platform transitioned from proof-of-work (PoW) to proof-of-stake (PoS) around mid-September.
It is worth noting that the securities watchdog filed a lawsuit against Ripple Labs Inc., led by Brad Garlinghouse and Chris Larsen in 2020. In the Ripple-SEC case which is slowly winding down, the SEC contends that the XRP sales violated the securities law and were sold as an unregistered security. Meanwhile, several ex-SEC officials have concurred that XRP isn’t a security.
In referring to this, Garlinghouse added;
“Why would the SEC, why would a government entity, when XRP at the time that the SEC started their investigation was the second most valuable asset, why would they be picking winners and losers? It’s just not the role of the government – not a capitalistic, democratic government. There are other governments around the world that might be in that business. The coo-coo for coco puffs is, how in the world can they say, because it went from proof of work to proof of stake, now all of a sudden it went back to being a security?”
Related: Attorney John Deaton States the Single Factor That Proves XRP Is Not a Security
On the whole, the SEC seems bent on regulating the crypto industry. Whereas crypto regulation is needed to reduce fraudulent activities and ensure a safe industry for investing, the approaches adopted by the SEC are seen by many to be an assault on the industry. Meanwhile, President Biden’s administration has released its first crypto regulatory framework.
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