Categories: Ripple

Ripple (XRP) is not a Security and here is why

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Ripple XRP

The crypto-sphere seems t be moving a notch higher after Ethereum was passed as not being in the securities category by SEC. The crypto-investor is more enlightened compared to two years ago and now they are getting to know the categories of virtual assets they are interacting with. Ripple (XRP) appears in many aspects not to be a security and here is why.

Why isn’t Ripple (XRP) a Security?

The SEC has so far declared two coins as non-securities, BTC and ETH. The decisions are based on their architectural designs in relation to the decentralized environment they operate in. the director of Finance at SEC, William Hinman, says that:

“When we think about how Ether today is operating, at least, we see a highly decentralized network, not the type of decentralized actor that characterizes securities offerings. In its current state, we don’t see value regulating it.”

The above statement has elicited a lot of debate as to whether XRP falls in the securities category. Earlier in the year, Ripple was taken to court by a trader who bought some XRP coins and upon selling made a loss of 30% out of the total 650 coins bought previously. This prompted the Ripple CEO, Brand Garlinghouse to say in response on an interview with CNBC:

“Whether or not XRP is a security shall not be dictated by one lawsuit. The SEC is the governor of that. I think it is very clear that XRP is not a security. It exists independently of Ripple the company. If Ripple, the company shut down tomorrow, XRP will continue to exist.”

The same sentiments were also expressed by the Chief Market Strategist at Ripple, Cory Johnson. On a separate CNBC interview where he insists:

“We absolutely are not a security. We don’t meet the standards for what a security is based on the history of court law. We’re 100 percent clear, it’s not a security. We don’t meet the standards.”

Ripple (XRP) Securities Debate

Determining the virtual coins that are securities or otherwise has been one of the reasons being blamed on the current market scenario and as SEC continue to sort out the mess, the investor will sit on the sideline awaiting clarifications. There are so many grey areas that need to be put straight and the fast it happens the better for the entire market.

Ripple (XRP) stands a better chance to be declared mot a security if the parameters qualifying Ethereum will stand. However the pending case against Ripple the company might delay the coin from is goals of moving forward. The current debate is more focused on the role the company plays in XRP rather that whether the coins not a security or otherwise.

To get the real XRP, you need to look at it as an asset and not a cryptocurrency. Taken as an asset it takes a form of an online “platform” that is not controlled by a central authority; it allows free movement of information in an open environment doing away with third parties and yields better speed in transaction and its scalability has been proven by the likes of IBM and American Express.

Ripple (XRP) Market Underperformance

With the debate still going on, XRP has been underperforming despite getting some of the most reputable strategic partnerships in the world. The price has remained under the $1 market since the market crash earlier in the year. The coin does have potential for mass adoption and the XRP value is set to skyrocket once the market gets back on its feet.

At the time of writing, Ripple (XRP) price was being quoted at $0.534211 representing a 0.12% gain against the USD and a marginal drop of 0.44% to BTC. XRP has been on the green light for the last 24 hours and this is just a short-term surge which might not hold for long given the performance of the major coins it is paired with in most exchanges.

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