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In view of the critical decision of the US Securities and Exchange Commission (SEC) that digital tokens are securities, CEOs of digital asset investment companies are really donating it to Ripple's native cryptocurrency, XRP – stating that it is only a digital fairy.
Most of the criticism focuses on the role that the centralized nature of the XRP token distribution model plays in its final classification. Collective investment sharing – with the intention of obtaining monetary gains from the efforts of others – is fundamental for the definition of security and the SEC has already considered that " initial money offerings " ( ICO) corresponded to description.
As such, ICOs are already tightly regulated to the point of non-existence in the United States. It is also worth noting that the SEC has already established that Bitcoin and Ethereum are not titles – but Ethereum-based tokens can be .
Ma – XRP is a cryptocurrency? Or a security?
SEC President Jay Clayton made the distinction clear with CNBC in June:
Cryptocurrencies: These are substitutions for sovereign currencies, replace the dollar, the euro, the yen with bitcoin. That type of currency is not a security.
Some major players in the industry seem to have the impression that XRP will be considered a security, and this could have far-reaching implications for the future of Ripple XRP Labs. [19659002] Anatoly Castella, CEO of Elpis Investment, the world's first investment fund in digital assets with AI technology, told reporters that he believes XRP is not a "real" cryptocurrency ", not suitable for "purer interpretation"
The founder of another major digital resource fund, Arianna Simpson of Autonomous Partners, echoed his sentiment:
I have many concerns about the level of centralization, and I have regulatory concerns if what they have released is a certainty
Castella went even further, asking for a third category for digital assets like XRP – "digital fiat", to ensure that "real" cryptocurrencies like Bitcoin are not negatively affected from the potential relapse related to XRP is considered a security
Ripple has no mining or mining activities whatsoever.Only, the transactions are fed through a bl centralized ockchain & # 39; to make it more reliable and faster. The XRP was extracted at one time from the parent company – Ripple Labs Inc – with a majority of the cryptocurrency held by them.
[…] in the long run will simply become a digital asset owned by institutional investors.
We recently reported the latest in a series of securities fraud cases filed against Ripple Labs and its CEO, Bradley Garlinghouse. That particular complaint claimed that Ripple Labs was constantly funding itself by slowly selling XRP.
This self-financing technique is a distinguishing feature of ICOs and ultimately leads to its classification as security, leaving the accused open to being accused of illegally trading millions of dollars in securities.
In fact, Ripple Labs has been forced to face some aspects of the cause, tweeting to clarify the differences between the backbone of Ripple and XRP.
The digital resource #XRP and the company #Ripple are distinctly different. Find out why. https://t.co/yv8cW1gYH6 pic.twitter.com/w3npq2O894
– Ripple (@Ripple) 9 July 2018
The SEC has yet to fix an official date to announce its decision , but it should be handed down in the next few months. Whatever the decision, it is sure that it will be crucial for XRP in its attempt to revive its market tops at the start of this year, when it briefly reached just over $ 3 before returning to fall below $ 0.30.
Update 09:10, July 24:
A spokesman for Ripple contacted us to provide the following statement:
Everyone is free to say what he wants or to pursue his own agenda in the media, but eventually the facts surrounding XRP will win on uninformed speculation. XRP does not give its owners shares in Ripple, XRP Ledger is decentralized among more than 150 independent validators (Ripple manages only 14) and XRP will continue to exist even if Ripple disappeared tomorrow [19659031]. Based on these facts – and many others – we continue to believe that XRP should not be classified as security.
Published 20 July 2018 – 07:46 UTC
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