Ripple CEO Talks About Why XRP Cannot Be a Security
Before now, there has been an issue over the classification of XRP. There is a class-action suit towards the determination of the asset’s classification. In recent times, the CEO of Ripple, Brad Garlinghouse, spoke again concerning the reason to not classify the asset as a security.
A lawsuit was filed against the firm in 2018 based on the conviction that it sold unregistered XRP tokens. Ripple filed a motion in Dec. 2019, requesting the crushing of the case because it lacked merit.
The motion filed by Ripple to dismiss the suit against it has been taken under submission by the United States District Court for the Northern District of California. However, it could take more time to have a final ruling. The announcement of the ruling was anticipated on January 15.
Garlinghouse spoke with CNBC in recent times and he said it is not possible to classify XRP as security. He absolved Ripple from all related responsibility, giving reasons why the asset cannot be classified as security.
The CEO said there should be no conflation of Ripple and XRP, as they are not the same entities. He said the existence of XRP is independent on Ripple; the asset will still exist if Ripple ceases to exist. “It’s an independent open-source technology,” he said.
He said owning XRP does not associate the holder with Ripple in any way. Holding the asset does not give the holder any equity or shares in Ripple.
In his suggestions, XRP does not have what it takes to be classified satisfy as security. When asked about possible ruling as security, he said it was not possible, maintaining that he could not come up with any argument on why it should be classified as security.
He added that while regulation would be perfect for the company, a negative ruling would be disastrous. An official ruling on the asset as security could prompt a panic sale that would end in a steep price decline.
Featured image courtesy of Ripple.com. Source: Cryptopress.