Ripple CEO Criticizes SEC’s Legal Battles, Warns of Losing WAR Against Ethereum

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Ripple CEO Brad Garlinghouse set his sights on the U.S. Securities and Exchange Commission (SEC), criticizing its ongoing legal battle and warning of potential losses in the war against Ethereum (ETH).

Garlinghouse highlighted the SEC’s struggles in court battles, conflicts with other regulators such as the Commodity Futures Trading Commission (CFTC), and its lagging position compared to international regulators.

The SEC picked fights with the industry and is losing badly in the Courts. 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? https://t.co/rG66npldf4

— Brad Garlinghouse (@bgarlinghouse) March 21, 2024 SEC’s Legal Setback

In a recent tweet post, Garlinghouse criticized the SEC for its aggressive stance against Ethereum and other industry players, noting that recent court decisions have severely hampered the commission

Garlinghouse’s tweet came against the backdrop of the SEC’s recent move to launch a regulatory campaign to classify Ethereum as a security, evident in its issuance of subpoenas to U.S. companies as part of an investigation into the asset. 

Furthermore, the SEC’s demand for “documents and financial records” of its transactions with the Switzerland-based Ethereum Foundation, further underscores its aggressive stance.

Drawing parallels to Ripple’s legal victory over the SEC in the XRP case, Garlinghouse warned that if the SEC fails to adjust to the Ethereum approach, it could undermine its authority and credibility with regard to cryptocurrencies systematically.

What if Ether Is a Security?

Ongoing investigation highlights the long-standing debate over Ether’s status as a security. If declared as such, Ether (ETH) would fall under SEC jurisdiction, a prospect that has sparked resistance within the industry.

This development threatens the SEC’s desire to approve spot Ethereum ETFs this year. Despite the approval of 11 spot bitcoin ETFs in January, the SEC’s current regulatory action casts doubt on Ethereum’s prospects.

Conflict with Fellow Regulators

Garlinghouse also shed light on the growing role of the SEC’s and other regulators, particularly the Commodity Futures Trading Commission (CFTC). This increase raises concerns about legal clarity and order in the financial system.

Additionally, Garlinghouse warned that the SEC’s tough stance could slow down innovation and investment in the US, potentially undermining its global competitiveness.