HomeNewsRipple CTO Challenges SEC: Is Ethereum (ETH) Trading Security or Currency?

Ripple CTO Challenges SEC: Is Ethereum (ETH) Trading Security or Currency?

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  • David Schwartz, Ripple’s CTO, seeks clarification from the SEC on Ethereum’s security status.
  • Despite the legal clarity surrounding XRP, ambiguity persists for Ethereum and other cryptos in the US.

SEC’s Misinformation Snafu and Ripple’s Inquisitive Stance

In the wake of a misleading update by top crypto media outlet Cointelegraph regarding the SEC’s position on BlackRock’s Bitcoin ETF application, the US Securities and Exchange Commission (SEC) quickly clarified its stance on the X app. The erroneous news led to a brief 10% price surge in Bitcoin against the US dollar, only for it to plummet back to original levels once Cointelegraph acknowledged and rectified its mistake.

Seeking to instill caution among the public, the SEC emphasized the importance of accurate information sources, noting that they themselves remain the most reliable source regarding their own stances. This prompted David Schwartz, Chief Technology Officer at Ripple Labs, to chime in with a pointed query about the regulatory standing of Ethereum (ETH).

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Ethereum’s Ambiguous Regulatory Landscape

Schwartz’s direct question revolved around whether the SEC viewed the sale of Ethereum on exchanges as tantamount to offering investment contracts. This posed query comes with profound implications, considering the widespread trading of Ethereum and its significant market presence.

As of the moment, the SEC hasn’t publicly responded to Schwartz’s question, a silence that seems calculated. Recognizing the gravity and potential ripple effects (pun intended) of such an answer, the regulatory body seems to be treading carefully.

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It’s pertinent to highlight that, in the US regulatory space, XRP stands distinct. It’s one of the few tokens to be legally acknowledged as non-securities, an accolade it acquired following a ruling by Judge Analisa Torres on July 13th. Contrastingly, neither Ethereum nor most other cryptocurrencies have acquired this official non-securities classification, leaving a cloud of uncertainty looming.

Deepening the intrigue, past discussions around Ethereum‘s non-securities classification have been marred by controversy. William Hinman, a former SEC official, previously made statements regarding Ethereum’s status. Rumors and speculation suggest Ethereum’s co-founder, Vitalik Buterin, might have had a significant influence on Hinman’s remarks.

Although Hinman has clarified that interactions with Buterin were primarily to grasp the Ethereum Foundation’s operations, the crypto community continues to speculate.

As regulatory bodies and the crypto world continue their intricate dance, questions like those posed by Schwartz underscore the need for clearer guidelines and more transparent communication. How the SEC eventually responds, if at all, remains to be seen, but it’s evident that the discourse is far from over.

Connect with Collin Brown on X (Twitter) for valuable market insights, frequent updates, and a touch of humor! 

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Collin Brown
Collin Brown
Collin is a Bitcoin investor of the early hour and a long-time trader in the crypto and forex market. He's fascinated by the complex possibilities of blockchain technology and tries to make matter accessible to everyone. His reports focus on developments about the technology for different cryptocurrencies.
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