Coinbase reveals discussions with the SEC regarding XRP and the increasing pressure in New York to classify Ethereum as a security.

Coinbase has published approximately 10,000 documents suggesting that the US Securities and Exchange Commission (SEC) had internal conversations regarding the security classification of XRP. Additionally, the documents reveal that the Chief of the Investor Protection Bureau of the New York State Office of the Attorney General requested the SEC to submit a brief concerning its stance on the security status of ETH. Recently, CNF reported that Coinbase is facing a lawsuit from Oregon’s Attorney General, Dan Rayfield, for purportedly enabling the sale of unregistered securities. The lawsuit identified 31 tokens as securities, which featured XRP and ETH among them. At the same time, the recent legal battle between the US Securities and Exchange Commission (SEC) and Coinbase Inc. has concluded following a mutual agreement to drop the enforcement actions. Following recent developments involving Coinbase Global Inc., the company has released 10,000 documents obtained through a Freedom of Information Act request to various agencies. Among these are documents that reveal internal discussions regarding the security classification of XRP. One email from 2023 indicates that Shamiso Maswoswe, the Chief of the Investor Protection Bureau at the New York State Office of the Attorney General, urged the Commission to submit an amicus brief to back the claim that Ether (ETH) should also be classified as a security. The determination of whether Ether is a security or not won’t affect our case (since we oversee both securities and commodities) – however, I believe that having a court rule Ether as a security would enhance investor protection. On the other hand, it would not be ideal (although this is not conclusive) for the court to rule that it is not a security. This raises the debate surrounding the security status of ETH and XRP. The debate regarding the security classification of ETH grew more heated following a lawsuit filed by Consensys against the SEC, led by Gary Gensler, concerning its regulatory stance on ETH. Consensys highlighted that William Hinman, a former Director of the SEC’s Division of Corporation Finance, had previously stated that Ethereum does not qualify as a security. At the same time, the SEC characterized XRP as a security in a separate letter dated December 9, 2021.