Altcoins

XRP Should Not Be Considered a Security, According to an Uncovered Document

XRP Should Not Be Considered a Security, According to an Uncovered Document

After the US Securities and Exchange Commission (SEC) confirmed that bitcoin and ethereum are not considered to be securities and therefore will not be regulated as such, the spotlight is now on the third-largest virtual currency by market cap – ripple (XRP).

However, the case might be already closed for XRP, as an agreement between Ripple Labs and US Financial Crimes Enforcement Network (FinCEN) signed back in 2015 was recently uncovered. As noted by one Twitter user, the precedent set in the said agreement, cannot be overruled by the SEC.

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Ripple was forced to pay a hefty fine of $700,000 in 2015 for “selling its virtual currency, known as XRP, without registering with FinCEN, and by failing to implement and maintain an adequate anti-money laundering (AML) program designed to protect its products from use by money launderers or terrorist financiers.”

The criminal charges were eventually lifted and the eventual fine settled at $450,000.

However, the fine and the subsequent settlement agreement might have proven to be more beneficial for Ripple, than the company could have ever imagined, as it clearly labels XRP as a currency and not a security.

Ripple CEO Brad Garlinghouse has also recently chimed in on the matter claiming that “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.“

Cory Johnson, the Chief Market Strategist of Ripple has previously echoed a similar sentiment saying that “We absolutely are not a security. We don’t meet the standards for what a security is based on the history of court law.“

Ripple has been hard at work to prove that XRP is not a security. The company is currently battling in several class-action lawsuits, claiming XRP is a security, controlled by Ripple. In an effort to dismiss these claims, the company has hired former high-profile SEC officials to represent them in court.

Even though Ripple continues to make partnerships with high-profile institutions, the price of XRP has been sliding alongside most other virtual currencies. It was trading for around $0.51 at press time, getting close to the yearly low of $0.47, set in April.

Image Source: “Flickr”

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I have been following the crypto markets since mid 2017, just in time to witness the incredible surge of the digital asset industry. Fascinated by the potential of blockchain technology I’ve started to dig deeper and that’s how I ended up meeting the Toshi Times team. I hold a Political Science degree, therefore the crypto regulation development is particularly interesting for me. I’m also heavily involved with music, running my own label, a YouTube channel and working with distribution. People call blockchain the ‘Fourth Industrial Revolution’ and I believe it will change our daily lives in the coming years and we will have the front row seats to witness it.