Brad Garlinghouse, the CEO of Ripple, has publicly defended Ethereum in response to increased scrutiny from the U.S. Securities and Exchange Commission (SEC). During a fireside chat at the XRP Las Vegas 2024 event, Garlinghouse criticized the SEC’s approach to Ethereum and Ripple, arguing that their repetitive stance is not productive. The event was moderated by Michael Arrington, the founder of Arrington Capital.
The debate over whether Ethereum should be classified as a security has intensified following comments from MicroStrategy CEO Michael Saylor, who labeled ETH and other major cryptocurrencies as unregistered securities. In contrast, Garlinghouse has consistently supported Ethereum, citing Ripple’s victory against the SEC when a judge ruled that XRP was not a security.
Garlinghouse’s statement, in which he criticized SEC chair Gary Gensler, was shared on Twitter by pro-crypto journalist Eleanor Terrett. He referred to Gensler as an “immoral human being” and accused him of overstepping his boundaries in his role.
Meanwhile, Consensys, an important development component of Ethereum, has filed a lawsuit against the SEC in Texas. The company argues that the SEC is exceeding its jurisdiction by attempting to regulate Ethereum as a security. They point out that Ethereum is not subject to SEC regulations, as previously stated.
The legal battle stems from a 2020 case in which the SEC classified XRP as a security. Ripple contested the ruling and eventually won when a federal judge declared that XRP is not a security. However, Ripple was found to have violated the law by initially serving institutional customers.
The SEC’s investigation is also delaying the approval of an Ethereum ETF, which would allow investors to buy Ethereum directly on the stock exchange. The decision is eagerly anticipated by investors, as it will determine the regulation of Ethereum and its role as a financial asset.
Former SEC head of Corporation Finance, William Hinman, previously stated that Ethereum is not considered a security. However, the current regulatory environment is more complex, posing a dilemma for both the SEC and crypto advocates.