According to two independent legal experts, it may be too late to classify XRP as a security. They believe that any regulatory clarity gained may far outweigh the costs or the negative effects it may have in the space.
XRP (XRP) Price Today – XRP / USD
Max Rich, who serves as the deputy counsel of Republic a crowdfunding platform, believes it’s unlikely that the SEC will compel Ripple Labs, to reimburse investors in the XRP token. Rich believes that the authorities would come for ICO projects believed to have marketed unregistered securities. As for XRP’s token sale, which occurred in mid-2013, he believes it may be too late to classify XRP as a security because it’s ICO happened a long time beforehand.
Michael Minihan, who works with blockchain development fund, BX3 Capital as a tax attorney and partner, indicates that XRP is seamlessly integrated within the digital currency sector. Echoing Rich’s thoughts that the token has operated for a long time which will make it avoid been classified as a security. Minihan also believes that the size of the token and its influence within the space would make XRP difficult to touch.
XRP Has Received Two Separate IndependentComplaints
The XRP token which is the second largest digital asset by market cap is also one of the most high-profile coins. Although the Securities and Exchange Commission hasn’t brought up charges against XRP, two secondary buyers of the ICO have filed separate independent complaints, claiming that the network promised financial returns, which is a primary characteristic of what a security should be under US financial law.
Ripple Labs and XRP: XRP is an Independent Virtual Asset
Ripple has reiterated that the XRP token, which it still owns the majority of its supply, is now an “independent virtual currency,” with clear-cut use cases. Hence, they believe it is a utility cryptocurrency, not an investment. Ripple created XRP as an exchange unit in xCurrent; a payments option designed to facilitate fast, seamless cross-border transactions, interbank.
The actual number of banks that have actively implemented xCurrent remains uncertain. However, the National Bank of Kuwait (NBK) earlier this year reported that it would be adopting xCurrent by the end of October 2018. Uk’s central bank (The Bank of England), also released a PoC (proof-of-concept) into the underlying technology according to a July 2017 report. Royal Bank of Scotland reportedly examined the technology but chose to discontinue.
American Express, Barclays, Credit Suisse, and UBS all tested xCurrent but declined to make any comments regarding the issue.
Security Debate About XRP
Although an SEC director publicly stated that ETH wasn’t a security in the summer, the regulatory body has remained disconcertingly quiet about XRP. Although regulatory uncertainty continues to surround it, the token has become a big winner from a market perspective. It recently moved into second place, which attracted more investors.
The debate as to whether XRP should be classified as a security might not be of chief concern. Financial restrictions might mean that the SEC opts to focus on recent violations, instead of regulatory violations that happened over five years ago. The primary issue for the banks is whether the XRP token actually offers real utility which will be an opportunity to improve international remittances and settlements. This could be a problem if the token doesn’t offer real utility.