Ripple CTO Poses Though-Provoking Question to the SEC

As a reaction to a tweet made earlier on the X app by the United States Securities and Exchange Commission (SEC), David Schwartz, the Chief Technology Officer (CTO) of fintech company Ripple Labs has hit the regulator with a question concerning the security status of Ethereum (ETH).

The Ripple CTO Prod

On Monday, top crypto media platform Cointelegraph told the public that the SEC had greenlighted BlackRock’s spot Bitcoin (BTC) Exchange Traded Fund (ETF) application. The news caused an uproar in the broad cryptocurrency ecosystem triggering a surge in the price of BTC to about 10% against the U.S. dollar. 

However, Cointelegraph released an update a few minutes later, stating that the news is false and was posted as a result of misinformation. By the time this update and apology was released, all excitement surrounding the BTC ETF had died down and prices returned to their former levels after first plunging.

The SEC took to the X app to encourage members of the public to remain vigilant and careful about the information they read on the internet, adding that “the best source of information about the SEC is the SEC. In what was perceived as a mockery inquiry, Ripple CTO, David Schwartz immediately asked the SEC if it thinks that people selling ETH on exchanges make up investment contracts.

Awesome. Does the SEC think people selling ETH on exchanges are selling securities? I'd like to hear from the best source. https://t.co/Mvgaa9DgUH

— David "JoelKatz" Schwartz (@JoelKatz) October 17, 2023

Till the time of this writing, no response has been given by the U.S. regulator regarding Schwartz’s question. Justifiably, the SEC gave no response to this question as it understands that an answer is pivotal and is likely to cause a rancour in the crypto space.

SEC Ties With Ethereum

Meanwhile, it is worth noting that XRP is the only token with a legal status in the United States as non-securities. Besides Bitcoin (BTC), neither Ethereum (ETH) nor any other cryptocurrency have been officially and legally recognized as non-securities. 

XRP token bagged this ranking after Judge Analisa Torres ruled that the coin is non-securities on July 13th. 

There has also been some controversies surrounding ETH’s non-securities classification by William Hinman, a former SEC official. It is strongly believed that Vitalik Buterin, Ethereum’s co-founder influenced the Hinman speech after a consultation with the latter. 

While the SEC official claimed that a much referenced call between himself and Buterin was just to understand how the Ethereum Foundation operates, many believe that there is more to it, lending another intrigue to Schwartz’ question.