Brad Garlinghouse: The American regulator will lose the war on Ethereum

Brad Garlinghouse Predicts SEC's Defeat in Ethereum Classification Battle

Ripple CEO Brad Garlinghouse has voiced his belief that the U.S. Securities and Exchange Commission (SEC) will not succeed in its efforts to categorize ether as a security. According to Garlinghouse, the SEC's longstanding contention with the cryptocurrency sector has seen the regulatory body face numerous setbacks in legal battles. Recent times have shown the SEC clashing not just with crypto entities but also with other governmental departments, such as the U.S. Commodity Futures Trading Commission (CFTC).

This assertion comes on the heels of comments made by Coinbase's General Counsel, Paul Grewal, who stated that ether's classification as a commodity is a settled matter, especially given the CFTC's stance. Grewal criticized the SEC for its baseless reasons behind rejecting applications for ether-linked spot Exchange-Traded Funds (ETFs). Adding to the discourse, former CFTC Commissioner Brian Quintenz has pointed out the SEC's contribution to regulatory ambiguity.

Garlinghouse's remarks also reference Ripple's ongoing legal skirmish with the SEC, which began at the end of 2020 when the SEC accused Ripple of conducting an illicit Initial Coin Offering (ICO) by offering XRP as an unregistered security. However, in a landmark judgment in July 2023, the Southern District of New York court delivered a partial victory to Ripple by ruling that XRP sold on secondary markets does not constitute investment contracts.

Building on this momentum, Garlinghouse has expressed confidence in the eventual launch of spot exchange-traded funds tied to XRP and other cryptocurrencies. He argues that such ETFs would serve as crucial instruments for risk diversification within the investment landscape. Garlinghouse's stance underscores a growing sentiment within the crypto community for clearer, more harmonious regulatory frameworks that recognize the evolving nature of digital assets.