By
Chimamanda U. Martha
April 18th, 2024
Commenting doubts regarding the status of its XRP cryptocurrency, startup Ripple insists on not classifying its token as a security.
Today there are a lot of debates about the status of the blockchain start-up Ripple‘s cryptocurrency (XRP ) and a possibility to classify it as a security under US regulations.
With a view to put to end all the talks around recent Coinbase rejection to add XRP to its platform due to questions over its status, Ripple’s chief market strategist Cory Johnson expressed his firm position: “We absolutely are not a security. We don’t meet the standards for what a security is based on the history of court law”.
The discussions arose as a results of doubts over the possibility to apply U.S. securities laws to cryptocurrencies. According to the U.S. Securities and Exchange Commission, it is necessary to use these laws in respect of them.
A great number of subpoenas and requests for information regarding sales of new digital coins have already been issued by the Commission. Moreover, U.S. officials are actively warning exchanges about possible consequences of listing unregistered tokens and try to discourage platforms from doing this.
Bitcoin and Ethereum, the major world’s cryptocurrencies, are currently not categorized as securities, but Ripple has recently become a subject of discussions with a lot of doubts whether this token may be possibly considered to be a security.
At the moment, only four coins are listed on the popular exchange Coinbase. They are Bitcoin, Bitcoin cash, Ethereum and Litecoin. Though it is already one of the largest crypto exchanges, it is believed that the addition of a new coin could attract even more users, first of all, buyers which would be very beneficious for traders.
Coinbase and Ripple held discussions about the feasibility of adding XRP to the exchange. But as Johnson explained, they did not touch the issue of the status of this cryptocurrency with regulators.
Johnson commented: “Coinbase never ever raised the issue of whether or not XRP is a security in our discussion about listing XRP. We’re 100 percent clear, it’s not a security. We don’t meet the standards.”
A spokesperson for Coinbase also confirmed that there was no discussion of XRP regulation but didn’t give any other details about their negotiations with Ripple.
San Francisco-based Ripple, that is working on development of a payments network for financial institutions, has its native cryptocurrency XRP that is currently the third-largest cryptocurrency with a market cap of more than $24 billion according to the data of CoinMarketCap. It reached its record price of $3.84 in January, but currently it is traded at $0.63, as it is reported by CoinMarketCap.
Recently, it has been announced that Ripple invested $25 million of its XRP into Blockchain Capital’s Parallel IV Fund that is a fund for early-stage projects. Though it is only the first fund the company has invested in, the team says that they are going to continue supporting promising blockchain and crypto projects.