2020-11-27 18:35 |
Ripple CEO Brad Garlinghouse is confident that his company would still flourish even if lawmakers in the U.S. declared its XRP cryptocurrency a security.
Speaking during a podcast interview with Morgan Creek Digital’s Anthony Pompliano, Garlinghouse delved into the repercussions of the United States Securities and Exchange Commission (SEC) recognizing XRP as a security. He posited that such a move would not be in accord with the stance taken by other G20 markets.
“You know if XRP were deemed a security here in the United States that, you know, we have other G20 markets that have taken a different view. I’m not aware of any market globally that thinks that XRP is a security.”
According to Garlinghouse, it is quite difficult to view XRP as a security. More importantly, over 90% of RippleNet customers are not based in the United States. This implies that the SEC classifying the cross-border remittances token as a security would not affect the company’s success.
Theoretically, if XRP was indeed declared a security under US laws, Ripple and other investors would be required to register a broker-dealer with the SEC.
Caught Between A Rock And A Howey PlaceRipple has been the center of controversy for years. The blockchain payments firm is currently in a legal battle with disgruntled investors who claim it sold and distributed XRP to them as an unregistered security offering. An amended complaint earlier this year alleged that Garlinghouse was strongly marketing XRP to potential investors while he was selling off his own XRP tokens.
The sentiment about XRP being a security has also been expressed by crypto observers like veteran commodity trader Peter Brandt.
However, others like Congressman Tom Emmer and the former chairman of the U.S Commodity Futures Trading Commission (CFTC), Christopher Giancarlo, have stated that they believe XRP does not qualify as a security.
Giancarlo specifically argued that XRP should not be classified as a security “under a fair application of the Howey test and the SEC’s presently expanding analysis”. According to him, XRP should instead be declared a currency or a medium of exchange.
The third-largest cryptocurrency had registered a ho-hum performance for years until recently when it pulled off a spectacular rally. It, however, plummeted significantly during Thursday’s market meltdown.
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