As Bitcoin, Ethereum, XRP, and other cryptocurrencies have grown, regulators have delved into this space, finding it necessary to stop bad actors from leveraging lax regulation to their advantage.
One of the biggest regulatory discussions in the cryptocurrency space is that of the legal status of digital assets. The reason: whether a digital asset is a commodity, security, or something else entirely will depend on how it is regulated.
Bitcoin and Ethereum have both been branded commodities by U.S. regulators, hence the futures contracts surrounding these digital assets.
But the third-largest cryptocurrency, XRP, is still in an odd spot: no one knows for sure whether or not the asset is a commodity or security or even neither. This uncertainty has seemingly led to a number of drawbacks for the XRP space, namely if institutions can dabble in it and in what way.
Though fear not, Ripple Labs, a company closely affiliated with the asset, is working on it. At an event in Switzerland, the CEO of Ripple, Brad Garlinghouse, said that “We have been talking to the SEC for some period of time,” adding that he feels his educating of regulators is a “really constructive process.”
Garlinghouse’s comment comes shortly after Commodity Futures Trading Commission (CFTC) Chairman Heath Tabert touched on XRP’s regulatory status in an interview with Cheddar:
“We’ve been working closely with the SEC over the last year or so to really think about which falls in what box because I think if I hear anything from market participants it’s that we really need clarity. That without clarity it’s really difficult to figure out how these will eventually be regulated.”
Presentations Present Evidence Suggesting XRP is a Security
This news comes as the discussion has ramped up about the altcoin’s potential classification as a security.
Per previous reports from Ethereum World News, Mike Dudas, CEO of The Block, recently shared two presentations on the cryptocurrency and its relation to Ripple.
The presentations weren’t attributed to a name nor dated, though they conveyed a comprehensive case, including a number of dated posts and comments from Ripple and its executives, that “the company created XRP, and that the company and its agents are selling the asset in excess of need for profit.”
Should this be true, that would mean XRP may be classified as an unregistered security, allowing a class of victims to win an ongoing lawsuit and may act as a long-term bearish catalyst for the asset’s price trajectory.
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