Former Regulator Calls Ethereum and Ripple – Non-Compliant Securities

Former Regulator Calls Ethereum and Ripple - Non-Compliant Securities

Altcoins Ripple XRP and Ethereum are likely “non-compliant securities” under U.S. federal law, according to Gary Gensler, former head of the Commodity Futures Trading Commission (CFTC). Gensler’s comments, while having little influence on how regulators treatment cryptocurrency, could reignite a long-standing debate about whether digital assets behave like stocks.

“Particularly Ripple”

Gensler recently told The Fresh York Times there is “a strong case” for both XRP and ether being considered non-compliant securities. Te his view, this wasgoed more the case for XRP, which is largely managed by the San Francisco-based Ripple company. Ether, on the other palm, has achieved a far more decentralized structure which makes it more capable of evading the contentious ‘security’ label.

Ripple has vehemently denied any eis that its XRP token operates spil a security. Earlier this month, the company’s chief marketing strategist Cory Johnson told CNBC that XRP is absolutely “not a security” and that it does not “meet the standards for what a security is based on the history of court law.”

XRP’s contested status may have thwarted Ripple’s attempt to get it listed on the major domestic exchanges. The company has reportedly suggested to pay for a spot on the covered Coinbase and Gemini exchanges but wasgoed turned down on both occasions. Nevertheless, the coin has catapulted to No. Five ter total trading volume with South Korea and Japan predominant the XRP trade.

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The author would argue that the case for Ripple not being a security is stronger than the assertion made by Gensler. For starters, XRP is not an ownership stake te Ripple the company and it does not pay dividends, either. Just spil banks choose to do business with Ripple and not employ XRP, so too is XRP independent of its parent company.

One area ter which Gensler seems to be on the money is initial coin offerings, a market that has attracted a superb overeenkomst of rente from the U.S. Securities and Exchange Commission (SEC). Already blacklisted ter China and South Korea, ICOs are being closely observed by U.S. regulators. The SEC recently issued a warning to exchanges that they vereiste register with the agency if they intend to suggest trading ter ERC-20 tokens that are deemed securities.

FUD-Less Rally

Gensler’s comments, however suggesting food for thought, can very likely be cataloged ter the FUD (fear, uncertainty and doubt) section of cryptocurrency news. It wasgoed the absence of such stories that helped catalyze a two-week rally ter cryptocurrencies, resulting te the build up of $140 billion.

Ether and XRP have bot integral to the rally, with each currency surging double-digits percentage wise. Ethereum gained more than 25% last week while XRP surged 44%.

Ether prices were last seen hovering north of $642 for a total market cap of $63.6 billion, according to CoinMarketCap. That makes it the clear-cut No. Two cryptocurrency by market capitalization.

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XRP, the world’s third-largest crypto asset, traded at $0.88 for a total market value of $34.Trio billion.

Disclaimer: The author wields bitcoin, Ethereum and other cryptocurrencies. He holds investment positions ter the coins, but does not engage ter short-term or day-trading.

Featured photo courtesy of Shutterstock.

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2 thoughts on “Former Regulator Calls Ethereum and Ripple – Non-Compliant Securities”

  1. This is what I see happening. With GBTC coming to closer to parity with NAV just spil you said and with the upcoming decision from the Winklevoss ETF (COIN) and the SolidX Bitcoin Trust ETF (XBTC). Let’s say they say yes, then you should see an influx of Bitcoin being purchased which should drive up the price of Bitcoin, which would te theory then drive up the price of GBTC. If they come back and say no, then ter theory GBTC would merienda again go up ter price and be further from NAV spil there would not be a COIN or XBTC ETF available to participate te. Either way, unless BTC falls dramatically for some reason GBTC should only go up from here with both good or bad news from the upcoming SEC announcements.

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