Ripple CLO Uncovers Key Grey Area In SEC’s U-Turn On Ethereum Probe

Ripple’s Chief Legal Officer (CLO), Stuart Alderoty, has pointed out significant ambiguities in the SEC’s recent decision regarding Consensys, a major Ethereum developer. This decision raises questions about the SEC’s stance on Ethereum transactions and related services like MetaMask and staking.

Ripple CLO Questions SEC’s Inconsistent Crypto Stance

The SEC announced it would close its investigation into Ethereum 2.0, ending a probe that had generated considerable interest. The decision followed a letter from Consensys, the company behind MetaMask, requesting confirmation that the SEC’s approval of Ethereum-based ETFs meant Ethereum would be considered a commodity.

Ripple CLO highlighted the SEC’s decision’s lack of clarity, seemingly contradicting previous assertions that digital assets and ecosystems should be classified as securities. His comments reflect broader concerns within the cryptocurrency community about the SEC’s regulatory framework and its application to various blockchain technologies.

A big win for Consensys, though questions remain. Does this mean the SEC thinks Consensys’ offers and sales of ETH are not securities transactions and/or that ETH itself is not a security? What will Gensler say if now asked? What is the status of MetaMask and staking?

This is…

— Stuart Alderoty (@s_alderoty) June 19, 2024

An earlier report by Coingape pro-XRP lawyer James Murphy stated that this inconsistency could strengthen Ripple’s position in its lawsuit. He noted that the SEC’s argument in the Coinbase hearing—that digital assets equate to securities—seems undermined by its latest stance on Ethereum. This dual approach has led to criticism and calls for more transparent and consistent regulatory guidelines.

Bill Morgan Criticizes SEC’s Unequal Crypto Treatment

Bill Morgan, a member of the XRP community, has criticized the SEC for what he sees as unequal treatment between Ethereum and Ripple. He pointed out that Ethereum has received favorable treatment since the Hinman speech, which declared it a non-security. Morgan argues that this preferential treatment highlights the SEC’s arbitrary approach to crypto regulation.

Morgan further questioned why the SEC needed to correspond with Consensys if Ethereum is decentralized. He argued that the criteria for determining whether a token is a commodity or security still need to be clarified and inconsistently applied. This sentiment is echoed by many in the cryptocurrency industry seeking clearer regulatory standards.

Also Read: Ripple CLO Stuart Alderoty Condemns SEC’s Unfair Tactics in XRP Vs. SEC Lawsuit