In an unexpected twist, Ripple CEO, Brad Garlinghouse, and Stuart Alderoty, the company’s Chief Legal Officer (CLO), have voiced their support for Ethereum amidst the U.S. Securities and Exchange Commission (SEC)’s scrutiny of the Ethereum Foundation. The SEC is reportedly aiming to classify, the Ether (ETH), as security.
This move by Ripple is unexpected for some in the crypto community, considering the past tension between Ripple’s XRP token and Ethereum. Ethereum co-founder Vitalik Buterin had previously made critical statements about XRP when the SEC filed its lawsuit against Ripple in 2020.
Ripple CEO Sees Deja Vu in SEC’s Actions
Ripple CEO, Brad Garlinghouse, believes the SEC is on a path to losing again, similar to its ongoing legal battle with Ripple over XRP’s classification. He criticized the SEC for picking fights with the crypto industry, including “fellow regulators like the CFTC,” and falling behind international counterparts. Garlinghouse expressed concern that the SEC is making the same mistake with ETH as it did with XRP.
Ripple CLO Calls for Congressional Intervention
In elaborating on Ripple’s standpoint, Stuart Alderoty repeated Garlinghouse’s worries on social media site X. He strongly asked the U.S. Congress to step in and stop giving money to the SEC, saying their actions are just plain crazy. Alderoty has become well-known for speaking out against the SEC’s rules under Chairman Gary Gensler, lately saying they lied in court and misused their power in the Debt Box case.
CFTC Contradicts SEC on Ethereum’s Status
Introducing an additional dimension of complexity, Rostin Behnam, the Chairman of the Commodity Futures Trading Commission (CFTC), offered a direct opposition to the SEC’s position. During his testimony before Congress, Behnam affirmed that both Bitcoin and Ether qualify as commodities, rather than securities. This contradicts the intentions of Prometheum, a licensed cryptocurrency securities platform, to provide custody services for ETH, contingent upon the SEC’s designation of it as a security.
Former CFTC Commissioner Highlights SEC’s Inconsistency
Adding fuel to the fire, former CFTC Commissioner Brian Quintenz pointed out that the SEC previously acknowledged Ethereum as being outside their jurisdiction. This sudden shift in stance is confusing and potentially harmful to investors. Quintenz further raised concerns that the SEC’s actions could lead to delays or denials of Ethereum ETFs, despite previously approving similar futures ETFs. This inconsistency, he argues, suggests the SEC’s current stance on ETH might be legally challengeable.
With the SEC, CFTC, and industry players in disagreement, the classification of Ether remains uncertain. Ripple’s unexpected support for Ethereum and the growing chorus of criticism against the SEC suggest a potential legal battle brewing over the future of Ethereum in the U.S. market.
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