Crypto assets have made huge strides in the past 12 months. However, the regulatory uncertainty around some cryptocurrencies isn’t showing any signs of subsiding. The biggest controversy is surrounding Ripple lab’s XRP.
The SEC brought a lawsuit against the company CEOs in November and while commission claims that XRP is essentially security and not a crypto token. There have also been a few question marks over Ethereum’s status and Attorney J. Carl Cecere wrote an article on Bloomberg to explain why they are wrong in attacking Ripple.
Cecere argues that XRP is not a security because it does not give holders a stake in the parent company, Ripple Labs. Both the currency and the company are independent of each other. Ripple does not have any information about the asset that it can use to manipulate its value and harm investors.
Cecere also pointed out that the SEC has recognized Bitcoin and Ether as commodities, so it doesn’t make sense to go a different route for XRP. He also mentioned that XRP provides greater benefits on the blockchain than its major rivals. It offers faster transactions at lower costs and doesn’t burden the environment with a massive carbon footprint. He also said that XRP couldn’t be treated as an investment contract either because of its independent nature.
Cecere believes that the SEC’s regulatory restrictions are counterproductive for innovation in the country and stressed upon the Biden administration to course-correct and stop interfering in the Crypto markets. Instead, the regulator’s new chairman, Gary Gensler, should collaborate with XRP to ensure a safe future for cryptocurrencies.