Ethereum’s success, at least in part, has been aided by the SEC’s favorable stance. Brad Garlinghouse, head of Ripple, said this at the online conference DC Fintech Week.
Garlinghouse argues it’s unfair that the SEC designates XRP as a security while not challenging Ethereum. In his view, the regulator’s stance has had a meaningful impact on the market.
“Over the last few years, XRP was the second-largest digital asset by market value. When it became clear that the SEC had given the green light to Ethereum, this regulatory clarity allowed the price of ETH to rise,” he said.
In 2017 XRP did briefly manage to hold the second spot in the crypto-asset market-cap rankings. At the time of writing the token sits in seventh place — Ethereum’s total value exceeds XRP by more than ninefold, according to CoinGecko.
In December 2020 the SEC charged Ripple and its executives with unregistered sale of securities under the guise of digital tokens worth $1.3 bn. Later the regulator amended the suit, focusing on the actions of Brad Garlinghouse and Chris Larsen.
In July 2021, the company secured a court subpoena for the former director of the SEC’s Corporate Finance Division, William Hinman. During the hearing he said that he warned Ripple about the risk of XRP being deemed a security.
In 2018 Hinman stated that Ethereum does not possess properties typical of securities.
Advocacy group Empower Oversight saw a possible conflict of interest in the actions of the former official. At the time he allegedly “received millions of dollars from his former employer, the law firm Simpson Thacher.” It was affiliated with the Enterprise Ethereum Alliance, which promoted the digital asset.
According to John Deaton, founder of the Deaton Law Firm, Hinman received $15 million from Simpson Thacher. The attorney noted that the leaders of the latter sat on the board of the Enterprise Ethereum Alliance.
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Btw, Bill Hinman collected $15m from his law firm — a Board member of the Enterprise Ethereum Alliance.
Also, btw, Hinman is now a partner with those same #Ether investors that he gave the regulatory free pass to. @CGasparino @EleanorTerrett @TeamCavuto @LizClaman
— John E Deaton (@JohnEDeaton1) October 22, 2021
On October 19 Garlinghouse gave an interview to Fox Business reporter Charlie Gasparino. The head of Ripple acknowledged that the regulatory conflict has not been good for the company’s business — it cannot operate in the United States. Outside the country, the year has been “amazing.”
Watch the latest video at foxbusiness.com
Garlinghouse noted that the SEC is trying to drag out the proceedings — the deposition of several witnesses has already been postponed to January 2022. Ripple, by contrast, seeks to resolve the matter in court as quickly as possible.
“It seems completely obvious to us that we did not violate U.S. securities laws in relation to operations with securities. XRP is not a security, and we believe we will ultimately prove this in court. Therefore, we want to close the case as quickly as possible,” he explained.
The Ripple chief also added that it is the SEC that “chooses winners and losers” in the crypto industry. He commented on the approval to launch bitcoin futures-ETF, granted to ProShares.
In September, Garlinghouse backed Coinbase in its clash with the SEC. The regulator warned the bitcoin exchange of potential legal action if it launches the Lend crypto-savings accounts.
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