Crypto Rating Council: XRP Uses “Securities-Like Language”
The new Crypto Rating Council, led by Coinbase and other major exchanges in the United States, have been rating tokens on whether they should be considered securities. According to their assessment, Ripple’s XRP has “securities-like language” and is likely a security.
There’s always been some controversy surrounding the legal status of Ripple’s XRP token. We’ve heard conflicting things. For example, the UK Financial Conduct Authority (FCA) does not consider XRP to be a security. Likewise, the Luxembourg Private Equity and Venture Capital Association (LPEA) has also said that “XRP is definitely not a security.”
However, the new Crypto Rating Council has a different opinion as it relates to U.S. law. The council claims that XRP ranks ‘4 out of 5’ in matching the criteria to be considered a security. The token’s marketing suggests the opportunity to earn profits. Similarly, XRP’s sale happened before the token had any utility. XRP earned the highest score out of any other cryptocurrency in the assessment.
The new Crypto Rating Council was started by Coinbase, Kraken, Bittrex, and other cryptocurrency giants to streamline the process of listings on U.S. exchanges. The rating system assesses whether a particular token is a security, and how likely it will be deemed so by the SEC.
So, it seems that according to much of the U.S. cryptocurrency industry, Ripple’s XRP is likely a security which might further complicate its future going forward.
Is XRP a security? Let us know your thoughts in the comments down below.
Image courtesy of InsideBitcoins.com