The U.S. Securities and Exchange Commission (SEC) has concluded its investigation into Ethereum, a move that could significantly bolster Ripple's defense in its ongoing legal battle. This decision has sparked optimism among XRP supporters and raised questions about the SEC's regulatory approach towards different cryptocurrencies.

The SEC's decision to drop the investigation into Ethereum's security status highlights the inconsistencies in its regulatory stance. Pro-XRP lawyer MetaLawMan argues that the SEC's dual approach in two cases, where it has successfully argued that "Digital asset + Ecosystem = Security" in the Coinbase hearing but concluded it was not a security in the Ethereum case, is "embarrassing." This inconsistency could fortify Ripple's defense in its lawsuit with the SEC.

The SEC's decision has also fueled criticism of its handling of cryptocurrency cases. Pro-XRP lawyer Bill Morgan has slammed the SEC for its perceived favorable treatment of Ethereum and its arbitrary approach to digital assets. He has called the U.S. SEC the "most regressive" regulatory body in the world and criticized the Australian Securities and Investments Commission (ASIC) for following the SEC's lead on crypto regulations.

The implications of this regulatory inconsistency are significant for the digital asset ecosystem. Ripple supporters argue that the SEC's evolving stance on Ethereum may validate the ruling from last summer in the XRP case, suggesting that digital assets can potentially fall outside the definition of securities. This could impact how future regulations are framed and strengthen Ripple's legal position in its ongoing lawsuit.