The Ripple CEO said he disagreed with the SEC that Ethereum could be considered an unregistered security after the move to the Proof-of-Stake consensus.
Brad Garlinghouse believes the regulator’s change of heart on Etherium echoes the Securities and Exchange Commission’s (SEC) lawsuit against Ripple filed in late 2020. According to Garlinghouse, the SEC’s latest statement about Etherium on PoS contrasts with what former SEC director of corporate finance Bill Hinman said in 2017 about Etherium on Proof-of-Work.
“We think ETH was a security but went unregulated because of the move to decentralisation,” Garlinghouse quoted Hinman as saying.
The Ripple executive added that when he heard the announcement, he told his colleagues that XRP is a decentralised, open-source digital asset. In which Ripple controls only a very small percentage of the network’s validators, meaning XRP is not a security. The law does not have what Bill Hinman is talking about, but if the SEC thinks so, it is for the best for XRP.
Garlinghouse added: There’s no justice in the SEC being able to pick winners and losers in the crypto markets. After all, that’s what the commission did when it filed a lawsuit against Ripple in 2020, and now says that Etherium has become a security.
“Why would a government agency like the SEC put pressure on XRP at a time when the asset was the second most capitalised? Why should regulators pick winners and losers? This is not the way a democratic government in a capitalist state should act. How can the SEC claim that because of the shift from proof of work to proof of stake, ethers have become securities again?”, the Ripple executive said indignantly.
Garlinghouse noted that although the SEC’s rhetoric towards Etherium has become hostile, it will not be abandoning the asset:
“I have not only invested in XRP, but I have also invested a significant amount of money in long positions in bitcoins and ethers and other cryptocurrencies.”
Last week, US Securities and Exchange Commission (SEC) Chairman Gary Gensler warned the Etherium community that stacking ETH after a network merger could fall under securities laws.
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