Ripple has so far purchased around $45 million worth of XRP with more assurance from the company executives that they may continue to purchase more to support a healthy market.
XRP, the fourth-largest cryptocurrency by market cap, has been the center of discussion among experts since its emergence. A part of the cryptocurrency community sees Ripple‘s XRP as nothing but a security while others do not treat it as such.
The recent comment on the status of the digital asset comes from Peter Brandt, who declared his stand rubbishing claims that XRP is not a security. This contradicts the view of Chris Giancarlo, former Commodity Future Trading Commission (CFTC) chairman who believes that XRP is not a security.
On November 10, 2020, a Twitter user expressed his view claiming XRP company owns almost half of the total circulating coins. In response, Brandt stated that the claim is a “classic case of the market being manipulated by a bag-holder.”
XRP would have been declared as a security if the SEC understood cryptos. This is a classic case of a market being manipulated by a bag-holder.
— Peter Brandt (@PeterLBrandt) November 10, 2020
The status of XRP has been up for discussion since 2018 with SEC unable to come out with a firm decision on this topic especially after cracking down on several crypto-related projects for selling unregistered securities. There have been reported lawsuits that condemn XRP as an unregistered security.
Ripple and XRP Activities Opening Way for More ‘Security’ Argument
Ripple, which has been said to be operating independently from XRP owns more than half of the total coins. Out of the 100 billion pre-mined coins, Ripple is said to own 60 billion XRP with 55 billion put in escrow. The Q3 market report published by Ripple speaks volumes with the revelation that the company has been purchasing a lot of the coins.
Ripple has so far purchased around $45 million worth of XRP with assurance from the company executives that they may continue to purchase more to support a healthy market. To clarify the ongoing misunderstanding concerning the security status of XRP, Giancarlo who happens to be no longer part of the regulatory body provides what may be holding the SEC back from treating it as an unregistered security.
In a paper entitled “Cryptocurrencies and U.S. Securities Law: Beyond Bitcoin and Ether” published in the International Financial Law Review, Giancarlo and other Co-Author argued that the recently improved adoption of XRP by Business to Business and Consumers as a medium of exchange and payment method underscores its utility as a substitute of fiat.
The paper further argues that the expanding analysis of SEC and Howey test put XRP under the same category as a medium of exchange or currency. In this case, the fair application of these yardsticks do not qualify XRP as a security.
XRP is currently on the move as it has sealed several partnership agreements with payment platforms and financial institutions. It is not fully decentralized as the other cryptocurrencies but centrally controlled with a percentage of the coins released into circulation annually.
Excellent John K. Kumi is a cryptocurrency and fintech enthusiast, operations manager of a fintech platform, writer, researcher, and a huge fan of creative writing. With an Economics background, he finds much interest in the invisible factors that causes price change in anything measured with valuation. He has been in the crypto/blockchain space in the last five (5) years. He mostly watches football highlights and movies in his free time.