Ripple CEO Brad Garlinghouse is confident that the U.S. Securities and Exchange Commission (SEC) will be unsuccessful in its attempt to classify Ethereum (ETH) as a security, just as it failed with XRP. In response to reports about the SEC’s legal actions to categorize Ethereum, Garlinghouse highlighted the regulator’s history of losses in legal battles with the crypto industry and suggested that it is now targeting disputes with other agencies like the U.S. Commodity Futures Trading Commission (CFTC). Garlinghouse compared the SEC’s struggles with XRP to its likely defeat in classifying ETH as a security. This comes in response to comments made by Coinbase’s Chief Legal Officer, Paul Grewal, who defended Ethereum and argued against its classification as a security.
Garlinghouse’s support for Ethereum has surprised many in the crypto community, considering Ethereum creator Vitalik Buterin’s critical remarks towards XRP when the SEC filed a lawsuit against Ripple in 2020.
Ripple’s Chief Legal Officer, Stuart Alderoty, also responded to Garlinghouse’s post and called for intervention from the U.S. Congress in the ongoing regulatory issues. He urged Congress to stop funding the SEC and labeled their actions as “insanity.” Alderoty has been a vocal critic of the SEC’s regulatory actions and policies under Gary Gensler’s leadership.
In contrast to the SEC’s stance, the Chairman of the Commodity Futures Trading Commission (CFTC), Rostin Behnam, testified before the House Committee on Agriculture and disputed 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, the possibility of introducing a spot-based Ethereum ETF in the near future would diminish. There has been optimism among crypto enthusiasts for the approval of an Ethereum ETF by the regulator this year, similar to the Bitcoin ETF approved in January. 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.