Ripple News: XRP Cleared of Security Classification, Yet Regulatory Hurdles Persist
A recent research paper by scholars has supported the notion that XRP is not a security, which is in line with a court ruling in the United States. The paper highlights the distinction between XRP sales on exchanges, which are not considered securities, and direct sales to institutions, which may be deemed securities. Even if XRP itself is not classified as a security, it can still be involved in transactions that are regulated as securities.
In the midst of Bitcoin’s recent decline, the future of XRP appears more uncertain than ever. However, there is a glimmer of hope as a new report from the European Corporate Governance Institute (ECGI) sheds light on the legal status of XRP, potentially providing a lifeline during these tumultuous times. This report aligns with a significant court ruling in the United States from the previous year and could have significant implications for the future of XRP.
To gain a deeper understanding of the ECGI report and its potential impact on your XRP investment, let us delve further into its findings. The report, titled “Corporate Governance Meets Data and Technology,” explores token offerings in the world of blockchain-based startups. It is authored by scholars Wei Jiang and Tao Li from Emory University and the University of Florida, respectively. They examine the regulatory landscape surrounding fundraising in blockchain-based startups, including initial coin offerings (ICOs), initial exchange offerings (IEOs), and security token offerings (STOs).
The ECGI report specifically focuses on Ripple and its native token, XRP, in its examination of regulatory concerns. With a particular reference to the Securities and Exchange Commission’s (SEC) lawsuit against Ripple Labs, the report delves into the question of whether XRP can be classified as a security.
Classification of XRP has been a subject of great significance. A pivotal moment in XRP’s journey occurred on July 13, 2023, when a U.S. federal court made a crucial determination. Contrary to the SEC’s allegations, the court ruled that XRP is not classified as a security when traded on public exchanges. However, it left open the possibility of a different classification for direct institutional sales.
Legal expert Bill Morgan provides valuable insights into the implications of the ECGI report. While acknowledging XRP’s non-security status, Morgan emphasizes the nuanced nature of its regulatory compliance. Despite not being labeled a security, XRP’s involvement in transactions subject to securities laws remains a significant consideration.
XRP’s path through the regulatory landscape is still filled with uncertainty. While the ECGI report offers some clarity regarding its legal status, the finer details of compliance continue to shape its trajectory.
In conclusion, the ECGI report and the court ruling have provided some reassurance about XRP’s legal status. However, the intricacies of regulatory compliance will continue to play a significant role in determining the future of XRP.