Ripple CEO Condemns the SEC for Refusing to Comment on Ethereum’s Legal Status

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Ripple CEO Condemns the SEC for Refusing to Comment on Ethereum's Legal Status
Ripple CEO Condemns the SEC for Refusing to Comment on Ethereum's Legal Status

Brad Garlinghouse, CEO of the financial technology company Ripple, again criticized the US Securities and Exchange Commission for refusing to clarify the regulation of the cryptocurrency market.

SEC Accused Ripple of illegally Selling Securities in the Form of XRP Tokens

Ripple is currently in a dispute with the US Securities and Exchange Commission, which has accused the company of illegally selling securities in the form of XRP tokens valued at $1.3 billion. Garlinghouse’s statement refers to earlier comments by the SEC representative on the legal status of Ethereum’s own cryptocurrency, Ether.

In 2018, William Hinman, the now-former director of corporate finance at the US Securities and Exchange Commission, announced that trading in ether was not subject to federal securities laws. Hinman said:

“As far as I understand the current state of ether, the Ethereum network and its decentralized structure, the existing supply and sale of ether are not securities transactions. There is little benefit to applying securities laws to ether,” 

SEC Declares: Hinman was only Expressing His Personal Views

For some time, people thought this was the SEC’s official position, but later regulators stated that Hinman was only expressing his personal views. Ripple tried to use Hinman’s words in his defense and asked him to testify in an ongoing court case.

In 2018, Bill Hinman stated that ETH was not a security and Chairman Jay Clayton agreed, Garlinghouse wrote: “Hinman filed an affidavit in court, where he said that the SEC has not yet taken any position or expressed a definite point of view regarding the status of ETH. And how should clarity be ensured in this market?”

On Tuesday, new SEC chairman Gary Gensler gave a detailed account of the regulation of the cryptocurrency market, noting that he believed that most tokens were unregistered securities. He refused to answer the question of whether ether is a security.