Ripple’s CEO Criticizes SEC, Highlights Potential Risk to USA Crypto Dominance from Ethereum Conflict
Ripple CEO Brad Garlinghouse has reignited the regulatory debate by criticizing the SEC’s approach to Ethereum (ETH) and warning of potential unintended consequences. Following the SEC’s recent legal battle with Ripple over XRP, Garlinghouse’s comments raise concerns about the future of cryptocurrency regulation in the US.
Garlinghouse didn’t hold back in pointing out the SEC’s difficulties, including courtroom setbacks and regulatory conflicts with other agencies like the Commodity Futures Trading Commission (CFTC). He suggested that the SEC is falling behind its international counterparts and questioned when they will realize that they are on the losing side of the battle against ETH, just like they lost against XRP.
In a tweet, Garlinghouse criticized the SEC’s aggressive stance towards Ethereum and other industry players, highlighting recent court rulings that have weakened the commission’s position.
Garlinghouse’s remarks come as the SEC intensifies its efforts to reclassify Ethereum as a security. This move is accompanied by subpoenas issued to US companies as part of a broader investigation into the asset. The SEC’s unwavering stance is further emphasized by its demand for documents and financial records from the Ethereum Foundation in Switzerland.
Drawing parallels to Ripple’s legal victory over the SEC in the XRP case, Garlinghouse warned that if the SEC fails to adjust its approach to Ethereum, it could undermine the commission’s authority and credibility in the cryptocurrency industry.
The ongoing investigation into Ethereum’s status as a security highlights the long-standing debate surrounding the cryptocurrency. If declared a security, Ethereum would fall under the jurisdiction of the SEC, which has faced resistance from the industry. This development poses a threat to the SEC’s plan to approve spot Ethereum ETFs this year, casting doubt on the prospects of Ethereum.
Garlinghouse also shed light on the growing role of the SEC and other regulators, particularly the CFTC. This raises concerns about legal clarity and order in the financial system. Additionally, he warned that the SEC’s tough stance could impede innovation and investment in the US, potentially undermining its global competitiveness.
The market for Bitcoin ETFs is heating up, with Blackrock IBIT surpassing 200,000 BTC in assets under management. However, the SEC’s current regulatory actions regarding Ethereum raise doubts about the prospects for Ethereum ETFs.