The reason why the SEC does not consider Ethereum a security is that it is a fully built blockchain infrastructure that has been operating for years. This is reported by FOX correspondent Charles Gasparino, citing his sources.
BREAKING (1/2): @SEC_Enforcement sources tell @FoxBusiness the logic of the agency’s case v @Ripple is that the company’s infrastructure is STILL being built out so XRP — the token which was used to finance the thing — is considered a security. @ethereum infrastructure is
— Charles Gasparino (@CGasparino) September 15, 2021
As a result, the regulator classifies the second-largest cryptocurrency by market capitalization as a commodity, unlike XRP.
The XRP token is still used to finance the fintech company’s business. That is why the SEC treated it as an unregistered security, Gasparino says.
The disclosure in court the regulator’s arguments regarding the classification of Bitcoin and Ethereum earlier became one of Ripple’s lines of defense during the SEC lawsuit.
XRP community members, in comments on Gasparino’s tweet, expressed skepticism about the regulator’s position.
They noted that Ethereum is currently transitioning to ETH 2.0, so questions arise about the definition of “fully built.”
In commentators’ view, it could also apply to Ripple’s infrastructure, since the distributed ledger XRP Ledger, on which the token is based, has also been operating for many years.
The RippleNet network, in which XRP is used as an intermediate currency for payments, is an independent structure, and the fintech firm in it is one of hundreds of participants, they noted.
Earlier, in 2020 Ripple CEO Brad Garlinghouse acknowledged that without XRP sales the firm would not be profitable.