IS XRP A SECURITY? LAWYER MAKES CASE FOR THIS ARGUMENT
While Bitcoin has been defined as a non-security by the Securities and Exchange Commission (SEC), the regulatory status of XRP, the third-largest cryptocurrency, is still up in the air.
The cryptocurrency being found as a security could, as fintech upstart Ripple put it, “upend and threaten to destroy the established XRP market more broadly.”
Despite these concerns, a lawyer with good knowledge of the blockchain space recently opined that “[it] sure sounds like a security,” referencing a California court’s ruling on a case regarding the cryptocurrency.
Is XRP a Security?
In an extensive Twitter thread, Stephen Palley — partner at Anderson Kill and an advisor/contributor to crypto outlet The Block — explained why he thinks XRP will most likely be deemed a security.
Some of the mentioned reasons for this assertion are as follows: “Ripple’s website provides advice on ‘How to Buy XRP’,”While defendant Ripple sells certain enterprise software products, the primary source of its income is the sale of XRP,” and “In 2013, defendant Ripple generated 100 billion units of XRP.”
All this — and more explained in the thread — led the lawyer to the conclusion:
My takeway: if I am a betting man, this Court is eventually – someday, and I don’t know when – going to conclude that XRP is a security and there isn’t a thing that the best lawyers in the world can do to change this fundamental truth.