Ripple CEO Predicts SEC's Demise in Wake of Ethereum Probe Outcry

CEO Brad Garlinghouse of Ripple (XRP) has shared his opinion on the ongoing SEC vs. Ethereum Foundation legal battle. Garlinghouse cited a statement by Coinbase's legal officer, Paul Grewal, who declared that several SEC commissioners have previously designated Ethereum as a non-security token. Garlinghouse believes the SEC will lose this case, as they did in the Ripple vs. SEC case, and expressed concerns about the SEC's relationship with the CFTC, another US regulatory body.

SEC's Ethereum Probe Sparks Outcry, Ripple CEO Predicts SEC's Demise

In a stunning twist in the ongoing regulatory saga involving the Securities and Exchange Commission (SEC), Brad Garlinghouse, CEO of Ripple Labs, has weighed in on the SEC's recent investigation into the Ethereum Foundation. Garlinghouse, whose company has been battling the SEC in court since 2020 over its alleged sale of unregistered securities, sees parallels between the two cases and predicts the SEC's ultimate defeat.

"The SEC picked fights with the industry and is losing badly in the Courts," Garlinghouse tweeted on March 21. "They're now fighting fellow regulators like the CFTC, and falling behind international counterparts. At what point will the SEC realize they will lose the war against ETH just as they lost against XRP?"

Garlinghouse's comments come in response to the SEC's investigation into the Ethereum Foundation, which is exploring whether the cryptocurrency Ether (ETH) should be classified as a security. This move has sparked outrage within the cryptocurrency community, who view it as a misguided attempt to stifle innovation.

Paul Grewal, Coinbase's chief legal officer, has also weighed in on the controversy, pointing out that several SEC commissioners have previously stated that Ethereum is not a security. Garlinghouse quoted Grewal's statement and added that the SEC's actions against both Ripple and the Ethereum Foundation are raising concerns about its relationship with other regulatory bodies, such as the Commodity Futures Trading Commission (CFTC).

"They're now fighting fellow regulators like the CFTC, and falling behind international counterparts," Garlinghouse said.

The CFTC has historically taken a more nuanced approach to cryptocurrency regulation, classifying Bitcoin and Ether as commodities rather than securities. This has created a rift between the SEC and the CFTC, with each agency vying for jurisdiction over the rapidly growing digital asset market.

The SEC's investigation into the Ethereum Foundation has also reignited the debate over the definition of a security. The SEC's chairman, Gary Gensler, has asserted that most cryptocurrencies fall under this definition, while others, such as Bitcoin, do not. This broad interpretation of the law has been met with resistance from the cryptocurrency industry, which argues that it stifles innovation and hinders the growth of the digital asset market.

The Ethereum Foundation, which oversees the development of the Ethereum blockchain, has not yet responded to the SEC's investigation. However, the community of Ethereum supporters is expected to mount a vigorous defense against any attempt to classify ETH as a security.

The SEC's actions against Ripple and the Ethereum Foundation are seen by many as a heavy-handed attempt to assert its authority over the cryptocurrency industry. However, the industry is fighting back, and the outcome of these legal battles could have profound implications for the future of digital assets.