Ripple’s CEO fact-checks Ethereum’s decentralization test at the SEC, calls it fiction

Source Cryptopolitan

Ripple CEO Brad Garlinghouse responded to a claim from Fox Business panelist and journalist  Charles Gasparino that the US Securities and Exchange Commission believes XRP passes the “Ethereum decentralized test.”

Garlinghouse said: “There is no Ethereum decentralization test at the SEC. This is fiction.”

Gasparino had quoted Garlinghouse’s video announcing the end of the SEC vs XRP legal battle on Wednesday. The SEC filed a lawsuit against Ripple Labs in December 2020, alleging the company violated US securities laws by selling $1.3 billion worth of XRP. 

Without registering the asset as a security, the agency argued that Ripple executives ignored prior warnings and failed to provide necessary disclosures to investors.

Ethereum or Howey test?

It is unclear if Gasparino meant to say the Howey or the Ethereum test, both of which members of the SEC have cited before. The financial watchdog backed its case against XRP with the “Howey Test,” a legal standard derived from a 1946 Supreme Court ruling in SEC v. Howey.

The test defines security as an investment involving the expectation of profits primarily from the efforts of others. The SEC contends that XRP met this condition at the time of its public offering to both investors and institutions, but Ethereum was previously determined not to be a security.

In a 2018 speech, William Hinman, former Director of the SEC’s Division of Corporation Finance, suggested that Ether did not meet the criteria of a security under the Howey Test, which he also called “the Ethereum test.” 

The idea behind the decentralization framework is that if a crypto project operates without a central entity or controlling group, there is no clear “issuer.” In such cases, no single party would have access to insider information or an unfair informational advantage over others.

However, emails released in 2023 tied to this speech indicate internal SEC discussions on the matter, revealing that officials were not all sure of Ether’s classification.

One email, dated June 12, 2018, from then-SEC Director of Trading and Markets Brett Redfearn, discussed some concerns over the agency’s position on Ethereum. 

“As written, the language remains vague as to whether ETH is a security. If you want to make an affirmative statement that it is not a security, the language could be stronger,” Redfearn wrote.

Adding to these internal discussions, an SEC official later stated in an email that the agency saw “no need to regulate Ether” as it was offered in 2018. Ripple published these documents as part of its legal defense.

XRP price trends upwards after SEC news

Meanwhile, analysts are closely watching XRP’s market movements against the backdrop of news the XRP community has coined as bullish. The crypto is up 13.2% in the last 24 hours, now changing hands slightly above $2.5, per Coingecko data

A crypto analyst known as “Steph” on X suggested that XRP may have completed its recent downward cycle and could strongly rebound upwards in the coming days. 

Another market observer noted that XRP had formed a higher high sequence, signaling the potential for a more profound bullish market trend. They gave some price projections of XRP reaching $2.79 to $2.92 before experiencing another pullback.

Cryptopolitan Academy: Want to grow your money in 2025? Learn how to do it with DeFi in our upcoming webclass. Save Your Spot

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
XRP Price Prediction: Fibonacci And Elliott Wave Analysis Suggests $15 By May 2025Egrag Crypto, a well-known crypto analyst on the social media platform X, recently shared an optimistic price prediction for XRP. According to the analyst, technical analysis of the XRP price on the
Author  NewsBTC
Dec 30, 2024
Egrag Crypto, a well-known crypto analyst on the social media platform X, recently shared an optimistic price prediction for XRP. According to the analyst, technical analysis of the XRP price on the
placeholder
Ripple (XRP) Price Sees a Surge, Solana Targets $600 in 2025 as Investors Increase Focus on New AltcoinThe cryptocurrency market is showing renewed momentum as Ripple (XRP) experiences a significant price surge, and Solana (SOL) sets its sights on a bold $600 target by 2025. Meanwhile, a rising altcoin, Lightchain AI, is capturing investor attention with its innovative ecosystem and strong presale performance, making it a compelling choice for forward-looking investors. Ripple […]
Author  Cryptopolitan
Jan 15, Wed
The cryptocurrency market is showing renewed momentum as Ripple (XRP) experiences a significant price surge, and Solana (SOL) sets its sights on a bold $600 target by 2025. Meanwhile, a rising altcoin, Lightchain AI, is capturing investor attention with its innovative ecosystem and strong presale performance, making it a compelling choice for forward-looking investors. Ripple […]
placeholder
Bitcoin Outlook 2025As the Bitcoin market continues to mature, its 2025 outlook appears highly favourable, driven by institutional adoption and regulatory developments.
Author  TradingKey
Jan 23, Thu
As the Bitcoin market continues to mature, its 2025 outlook appears highly favourable, driven by institutional adoption and regulatory developments.
placeholder
What Crypto Whales are Buying For May 2025Crypto whales are making bold moves heading into May 2025, and three tokens are standing out: Ethereum (ETH), Artificial Superintelligence Alliance (FET), and Onyxcoin (XCN).
Author  Beincrypto
Apr 21, Mon
Crypto whales are making bold moves heading into May 2025, and three tokens are standing out: Ethereum (ETH), Artificial Superintelligence Alliance (FET), and Onyxcoin (XCN).
placeholder
Gold Price Forecast: XAU/USD attracts some sellers below $3,250 on firmer US DollarThe Gold price (XAU/USD) extends the decline to around $3,245 during the early Asian session on Thursday. The precious metal edges lower to near a two-week low amid easing US-China trade tensions and stronger US Dollar (USD) demand. 
Author  FXStreet
May 01, Thu
The Gold price (XAU/USD) extends the decline to around $3,245 during the early Asian session on Thursday. The precious metal edges lower to near a two-week low amid easing US-China trade tensions and stronger US Dollar (USD) demand. 
goTop
quote