Coinbase reveals internal SEC conversations about XRP and an ask from NY to support ETH security claim

Newly released documents reveal that the U.S. Securities and Exchange Commission internally discussed whether XRP could be classified as a security and that the agency was asked by the New York Attorney General’s Office to file a brief in support of their argument that ETH is a security.

Coinbase unleashed over 10,000 documents stemming from Freedom of Information Act requests to multiple agencies, including the SEC, on Wednesday morning.

In one email from June 2023, New York State Office of the Attorney General Investor Protection Bureau Chief Shamiso Maswoswe asked if the SEC to file an amicus brief “in support of the argument that Ether is a security.”

The New York Attorney General’s office sued KuCoin in March 2023 for violating the state’s laws around the trading of securities and commodities, and notably, named ether as an unregistered security.

“We would like to request that the SEC file an amicus in support of the argument that Ether is a security,” Maswoswe said. “Whether it is or not will not be dispositive in our case (we have authority over both securities and commodities) – but I think it would be beneficial to investor protection to get a court to hold that Ether is a security. Conversely, it wouldn’t be great (though again not dispositive) for the court to decline to find it’s a security.”

The question of whether ether is a security came up under former SEC Chair Gary Gensler’s leadership. Consensys sued the agency last year and said the agency’s enforcement director allegedly approved the investigation into Ethereum 2.0 to examine people and entities buying and selling ether. That was later dropped. Gensler has skirted the question of whether ether is a security. However, he has noted that many cryptocurrencies are and would fall under his agency’s jurisdiction.

Now under new leadership, the SEC has taken a friendlier stance toward crypto, in part through dropping previous charges against big firms, including Coinbase.

The SEC also emailed internally about whether XRP had the characteristics of a security in 2021, according to the FOIA documents released on Wednesday.

“Could we ask him to opine on what risks to the XRP blockchain would or might materialize if Ripple ‘walked away’ or ‘disappeared’?” according to one email.