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

SEC chairman recently gave a broad comment on crypto market regulation but refused to answer the question of whether Ethereum is a security or not.

August 5, 2021, | AtoZ Markets – The CEO of the fintech company Ripple, Brad Garlinghouse, once again criticized the US Securities and Exchange Commission (SEC) for refusing to provide clarity on the regulation of the cryptocurrency market.

Ripple is currently in dispute with the SEC, accusing the company of illegally selling securities in the form of an XRP token worth $1.3 billion. Garlinghouse’s claims are linked to earlier comments from SEC representatives about the legal status of ether, Ethereum’s own cryptocurrency.

In 2018, the former director of the SEC’s corporate finance division, William Hinman, announced that ether deals were not regulated by federal securities laws.

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,” Hinman said

Related: Ripple Cites SEC Commissioners’ Remarks to Support Dismissal of Case

For some time it was believed that this was the official position of the SEC, but later the regulator explained that Hinman expressed only his personal point of view. Ripple is trying to use Hinman’s words in its defense and has involved him in testifying in the ongoing proceedings.

In 2018, Bill Hinman said that ETH is not a security, and Chairman Jay Clayton agreed with him,” Garlinghouse writes.

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, the new SEC chairman Gary Gensler gave a broad comment on the regulation of the cryptocurrency market, noting that most tokens, in his opinion, are unregistered securities. He refused to answer the question of whether the ether is a security or not.

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