Ethereum
Is Ethereum Safe? Ripple CTO Breaks Silence
Gamza Khanzadaev
Ripple CTO David Schwartz has broken his silence, disputing claims that Ethereum is a security and questioning the very foundations of cryptocurrency regulation
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In response to the recent launch of Ethereum exchange-traded funds (ETFs), Brian ArmstrongCoinbase CEO, hailed the development as a major step toward regulatory clarity.
He noted that by approving the ETF, the US SEC has officially confirmed that Ethereum (ETH) is not classified as a security. The Coinbase executive highlighted the exchange’s role as the primary custodian for eight of the nine newly approved ETFs. Ethereum ETF.
However, this announcement sparked a heated debate among some members of the crypto community. Some argued that ETH, after its Merge network upgrade, should be considered a security due to its staking model and the artificial inflation of its value. In this case, Ethereum has been described as a “Ponzi scheme” through controlled manipulation of supply.
Is Ethereum a security?
Ripple CTO David Schwartz has waded into this debate, questioning the premise of Ethereum’s classification as a security. First, he questioned whether Ethereum could be considered an investment contract, pointing out the lack of a clear counterparty in such a contract.
He also criticized the argument that common interests between Ethereum stakeholders could be considered a joint venture, a key factor in defining a security.
The debate extended to broader issues of market manipulation and fraud in the cryptocurrency space. Schwartz rejected the idea that common interest amounts to a common enterprise, suggesting that such an interpretation could wrongly apply to various markets beyond cryptocurrency.
As an example, he suggested that FTX’s alleged actions could be considered fraudulent, even though they do not constitute market manipulation under technical definitions.
About the Author
Gamza Khanzadaev
Financial analyst, trader and crypto enthusiast.
Gamza holds a degree in Finance and Credit with a specialization in Securities and Financial Derivatives. He also completed a Master’s program in Banking and Asset Management.
He wants to participate in covering economic and fintech topics, as well as raising awareness among more people about cryptocurrencies and blockchain.