Clarifying ambiguities regarding the status of their native XRP cryptocurrency, fintech startup Ripple confirmed that the token cannot be classified as a security.
Debates have arisen about whether cryptocurrencies classify as securities as per the rules of the United States Securities and Exchange Commission (SEC), which has also warned cryptocurrency exchanges to refrain from listing unregistered tokens. While Bitcoin and Ethereum are generally not categorized as securities, Ripple has recently been the target of increased scrutiny, with many arguing that the token might possibly qualify as a security.
However, Ripple maintains that XRP does not fit into the category of securities. In an interview with CNBC, Ripple’s chief market strategist, Cory Johnson, stated:
“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 statement comes after speculation arose regarding the possibility of Ripple being listed on crypto exchange Coinbase (which currently only lists Bitcoin, Ethereum, Litecoin and Bitcoin Cash).
Rumors regarding the possible listing have arisen on more than one occasion. The first instance occurred in January this year, when rumors about a possible listing sent XRP soaring up to a record high of $3.84, only to drop after Coinbase denied the rumors. The second instance occurred last month, when Ripple rose by 16% on renewed speculation that it was about to get listed on Coinbase.
However, despite the rumors, Ripple has yet to be listed on the exchange, and many have speculated that Coinbase may be hesitant to list the cryptocurrency owing to ambiguities about its status with regulators. However, while he confirmed that Ripple had been in talks with Coinbase about adding XRP to Coinbase, Johnson added:
“Coinbase never ever raised the issue of whether or not XRP is a security in our discussions about listing XRP. We're 100 percent clear, it's not a security. We don't meet the standards.”
A Coinbase spokesperson also confirmed that the matter did not come under discussion with Ripple, and that the talks between the two companies were limited to the exchange’s general criteria for adding assets (which was updated in March this year). The Coinbase spokesperson did not offer any further details on their discussions with Ripple.
XRP, meanwhile, appears to be on an upward trajectory. After having spent the past few weeks in the $0.40-$0.50 range, it has finally broken through the $0.60 mark. This upward move is likely propelled by Johnson’s firm clarification and recent developments including Ripple having invested $25 million worth of XRP in Blockchain Capital’s new venture fund, and Santander having launched a blockchain-powered foreign exchange service which utilizes Ripple’s technology.