Ripple’s XRP vs. SEC: What will be the verdict?
The SEC verdict on whether Ripple’s XRP is actually a security or not is approaching fast. According to the SEC, neither Bitcoin nor Ethereum are considered securities. This decision by the SEC authorities has got the digital currency’s fans hopeful that the SEC will take a similar stand for the third largest cryptocurrency. The past week has been a tough one for Ripple’s XRP, the coin was snubbed yet again by Coinbase.
The irate XRP community did not take this snub very well. One of them, an XRP investor called Pete Dakin claimed that the exchange could possibly be abusing its market power. Furthermore, he appealed to the Financial Industry Regulatory Authority (FINRA) to investigate Coinbase for possible price manipulation. Surprisingly enough, FINRA replied to Dakin’s tweet saying, “Thank you for bringing this to our attention.”
The crypto sphere across the world has remained anarchic for the most part. But certain countries seem to be sitting up and taking notice of the writing on the wall. The governments of many Asian countries have started imposing rules and regulations on the crypto world. However, the European and American crypto sectors seem to be unregulated still. But even there, the authorities have started taking notice. Moreover, with several cryptocurrencies being accused of being securities, the proper authorities will have to come to a decision.
While SEC authorities have declared that Bitcoin and Ethereum aren’t securities, the SEC has given guidelines. These guidelines describe how they assess each cryptocurrency’s financial nature. So a coin which started via an ICO could be considered as securities. And other coins will be considered something akin to fiat currency. While there’s a lot of FUD about SEC regulations in the crypto world, they’re actually not looking to interfere. According to Global Coin Report, they won’t interfere unless things go out of control.
Why can XRP not be deemed as a security by SEC?
Having said that the SEC isn’t looking to interfere in the crypto world, they still have to take a decision on XRP. Ripple’s XRP is still swimming in troubled waters with three lawsuits, which claim that the crypto coin is a security. These lawsuits have cast a shadow over the project. So it all boils down to which way the SEC’s decision will swing.
And as we’ve said before, the chances of the SEC declaring the digital asset a security is quite low indeed. The main reason being that Ripple’s XRP never had an ICO. And according to the SEC, the main standard to declare a coin as a security is if it’s preceded by an ICO. Ripple Labs has pre-mined every single XRP token that’s in existence before the tokens went live. Moreover, unlike Bitcoin and a few other cryptos, XRP doesn’t need miners. So in our opinion, Ripple’s digital asset is quite safe.
XRP is not Ripple, Ripple is not XRP
While Ripple cannot do anything to influence the SEC’s decision, the Blockchain company is taking measures which could help. The company announced that the digital token is separate from the company Ripple, thus clearing any lingering doubts. Ripple’s CEO, Brad Garlinghouse has explained that the coin and the company aren’t identical. He further stressed that the cryptocurrency is decentralized and not owned by Ripple Labs in any way.
With the precedent of the SEC’s decision on Bitcoin and Ethereum, it’s quite likely that XRP is safe.
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