Ripple (XRP) is Faced with Regulatory Status Controversy
Ripple’s token XRP is not evolving as fast as planned and this may also be because more potential investors want to make sure whether it is a security or not. The Ethereum situation is currently clarified ad the SEC admitted that it’s not a security, now people hope to hear more information regarding Ripple as well.
Ripple’s status is still unclear
Investors and regulators are worried by some features of Ripple’s XRP. This obviously does not mean that it has been or will be classed as a security by the SEC, but it’s still under investigation. There’s been a lot of speculation around the coin especially since it got hit by a lawsuit to determine its future status.
SEC’s William Hinman believes that classifying XRP is not that easy. He says that a security is an investment vehicle for buyers with specific expectations and if they expect the coin to raise its value, it can then be considered to be a security. On the other hand, this concept would apply to all cryptos, tokens, and assets in today’s market.
Regarding Bitcoin, no central entity can determine the future of the project and Ethereum is also similarly decentralized. As we said, both of them have been investigated y the SEC, and the conclusion was that they’re not securities. Ripple’s XRP is entirely controlled by a centralized entity in various ways. This will change in the future, but the project remains centralized. This duality makes it challenging for the SEC officials to make a final decision about its status.
Author Nathaniel Popper believes that XRP is a security
Nathaniel Popper is a crypto enthusiast and respected author, and he believes that XRP might as well be classed as a security. He shared his views on Twitter, and he doesn’t seem to favor any outcome from his statement but even more debate.
The SEC comments this morning seem to have been worded to strongly suggest, without saying it outright, that Ripple’s cryptocurrency, XRP should be categorized as a security. Do lawyers out there disagree? And why not just come out and answer this lingering question?
— Nathaniel Popper (@nathanielpopper) June 14, 2018
Ripple’s native asset XRP is utterly different from Bitcoin and Ethereum in every possible way, and this means that it could be regulated in a different way.
Some voices in the crypto space have been offended by Popper’s statement, and he is currently considered to be biased against XRP. There’s also the question whether a security label would change XRP’s fate and how it would impact crypto exchanges. We’ll just have to wait and see what the SEC decides.
Andreas Townsend Author
I am a technical writer, author and blogger since 2005. An industry watcher that stays on top of the latest features, extremely passionate about finance news and everything related to crypto.