The CEO of Ripple stated that he disagreed with the SEC that Ethereum after the transition to the Proof-of-Stake consensus can be considered an unregistered security.
Brad Garlinghouse believes that the change in the regulator’s view of Ethereum echoes the US Securities and Exchange Commission (SEC) lawsuit against Ripple filed at the end of 2020. According to Garlinghouse, the latest SEC statement about Ethereum on PoS contrasts with what former SEC Corporate Finance Director Bill Hinman said in 2017 about Ethereum on Proof-of-Work.
“We think that ETH was a security, but went unregulated due to the transition to decentralization,” Garlinghouse is quoted as saying by Hinman.
The Ripple executive added that after hearing this statement, he informed his colleagues that XRP is an open source decentralized digital asset. In which Ripple controls only a very small percentage of network validators, which means that XRP is not a security. The law does not have what Bill Hinman says, but if the SEC thinks so, then it is for the best for XRP.
Garlinghouse added: It is not fair that the SEC can choose winners and losers in the crypto markets. After all, this is exactly what the commission did when they filed a lawsuit against Ripple in 2020, and now they say that Ethereum has become a security.
“Why would a government agency like the SEC put pressure on XRP at a time when the asset was second in terms of capitalization? Why should regulators choose winners and losers? This is not how a democratic government should act in a capitalist state. How can the SEC claim that due to the transition from proof of work to proof of stake, ethers have become securities again?
Garlinghouse noted that although the SEC’s rhetoric regarding Ethereum has become hostile, he will not abandon the asset:
“I have not only invested in XRP, but I have also invested a significant amount of money in long positions in bitcoin and ether, and other cryptocurrencies.”
Last week, U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler warned the Ethereum community that ETH staking after the network merger could be subject to securities laws.
Source: Bits
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