Ripple CEO Brad Garlinghouse has challenged the US Securities and Exchange Commission (SEC) over their approach to Ethereum. Other leading industry figures also want clarity on Ethereum’s status.
Garlinghouse also went on to slam the SEC on Monday (March 25), claiming that they have ‘repeatedly acted outside the law.’
On his X account, formerly Twitter, Garlinghouse suggested that the SEC plans to ask a judge for $2 billion in a case that involved no allegations or findings of fraud or recklessness.
The fresh scrutiny – surrounding the status of Ethereum – is how the SEC wants to label Ethereum as a security. In turn, this would provide tighter regulations for the cryptocurrency.
It was only last week that Genesis Global Capital was fined $21Million by the SEC for illegal security activities. Genesis’ crypto lending program sold securities to its investors without registering them, according to the SEC.
Gensler’s SEC has repeatedly acted outside the law – not going unnoticed by Judges admonishing the agency for a "gross abuse of the power entrusted to it by Congress" (DEBT Box case) and for acting without "faithful allegiance to the law" (Ripple case). Let’s not also forget… https://t.co/vay6WDBfJc
— Brad Garlinghouse (@bgarlinghouse) March 25, 2024
Ethereum Classification
The uncertainty surrounding Ethereum’s classification has also been met with backlash from Coinbase’s chief legal officer Paul Grewal. He suggested that the SEC are overreacting in its efforts to regulate ETH.
Garlinghouse also emphasized the same viewpoint. The Ripple CEO further highlighted how the SEC could stifle innovation and create confusion in the market in the long term.
Overall, the landscape of cryptocurrencies faces a large period of uncertainty as the SEC tries to determine its classification, namely Ethereum.
The chair of the SEC, Gary Glesner, wants many other cryptocurrencies to be classified as securities. This would also align with the wider efforts of the Biden administration to tighten regulations.
Subpoenas were sent to several companies involved with the Ethereum Foundation, which initiated the investigation from the SEC.
Gensler has also hinted that Bitcoin would face the same fate as Ethereum. The SEC chair is keen to enforce regulations and labelling them as securities.
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