Coinbase reveals SEC emails on XRP, ETH classification

Internal communication documents obtained through the Freedom of Information Act (FOIA) show that U.S. regulators privately discuss whether Ethereum (ETH) should be considered a security.

The documents, released by Coinbase on Wednesday, reveal new insights into the cryptocurrency policy making process.

In an email in June 2023, Shamiso Maswoswe, head of the Investor Protection Bureau of the New York Attorney General's Office, asked the U.S. Securities and Exchange Commission (SEC) to submit a friend-in-law summary supporting the idea that Ethereum is seen as a security.

Maswoswe made the claim in the New York Attorney General’s legal battle with Kucoin, the state accusing Kucoin of violating securities and commodity laws. In this case, Ethereum was called unregistered security, which was a rare practice at the time.

"We hope the SEC will submit a friend-of-court summary in favor of Ethereum as a security argument," Maswoswe wrote.

She acknowledged that the court's ruling would not directly affect the outcome of the Kucoin case, but added that a formal court ruling would help investor protection efforts. "It would be beneficial," she said. "Instead, a ruling that ruled that ETH was not safe would be helpless."

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XRP is also under discussion in the internal SEC

In addition to Ethereum, the documents also show that the SEC discusses internally whether XRP may comply with the legal definition of security. This is in the midst of a long legal battle between Ripple and the agency, and the case has become one of the focal points of attention in the cryptocurrency industry.

The documents published by Coinbase include more than 10,000 files from multiple agencies, including the SEC. The exchange said it seeks these records to promote transparency in crypto regulations and clarify the over-concern concerns that have plagued the industry for years.

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