The status of XRP within regulatory frameworks has sparked renewed discussions in the crypto community, particularly regarding whether it is now recognized as a currency.
This debate gained traction after comments from Wall Street analyst Linda Jones during a recent podcast, where she asserted that the digital asset had long been considered a currency, even before the SEC lawsuit against Ripple Labs.
Abdullah Nassif, the host of the Good Morning Crypto podcast, expanded on this by questioning whether XRP has now been “finally” acknowledged as a currency, citing Jones’ comments. The conversation centers on the ongoing legal discussions surrounding the token and its classification in light of the SEC’s efforts to regulate it.
XRP Classified as a Virtual Currency
Jones noted that, as far back as 2015, U.S. authorities had already treated XRP as a virtual currency in regulatory actions. In particular, the U.S. Financial Crimes Enforcement Network (FinCEN) labeled XRP as a “virtual currency” during its enforcement action against Ripple Labs.
At the time, Ripple was penalized for violations of the Bank Secrecy Act (BSA) and failure to implement adequate anti-money laundering (AML) procedures.
The FinCEN classification did not, however, address whether the token should be regarded as a security. Instead, the focus was on ensuring that Ripple and its subsidiary, XRP II, LLC, complied with AML obligations.
Despite this early classification of XRP as a virtual currency, it did not provide a definitive answer on how the asset should be regulated in the broader financial landscape, particularly concerning securities law.
The SEC Lawsuit and Non-Security Status
Fast-forward to 2023, and the regulatory focus had shifted significantly, with the SEC’s lawsuit against Ripple seeking to classify XRP as a security. In July of that year, Judge Analisa Torres ruled that the digital asset itself was not a security when sold on secondary markets, a landmark decision for the cryptocurrency industry. The SEC sought to appeal this decision, but the court rejected their interlocutory appeal.
Jones highlighted that, despite the legal battles and the potential for continued regulatory challenges, XRP’s status as a non-security remains legally intact. She argued that the 2015 classification by FinCEN, coupled with the 2023 court ruling, provides a strong precedent that the token is not a security but functions as a virtual currency. She emphasized that the SEC’s legal position on XRP is increasingly weak.
Prospects of an SEC Appeal
Although speculation persists that the SEC could make another attempt to appeal the 2023 ruling, prominent legal figures, including Ripple’s Chief Legal Officer Stuart Alderoty, have expressed confidence that XRP’s legal status will not be overturned.
During a recent interview with law professor J.W. Verret on Crypto Law TV, Alderoty made it known that even if the SEC were to pursue further appeals, the core determination that XRP is not a security would remain unchanged.
Jones echoed this sentiment, stressing that an appeal is unlikely to alter the digital asset’s current classification. She believes the odds of the SEC successfully challenging the decision are low, given the mounting evidence and previous legal decisions that support the token’s non-security status.
We are on twitter, follow us to connect with us :- @TimesTabloid1
— TimesTabloid (@TimesTabloid1) July 15, 2023
Implications for the Future
As it stands, the regulatory outlook for XRP appears to favor its continued classification as a virtual currency, particularly in the United States. However, ongoing discussions around the broader regulation of cryptocurrencies suggest the token’s status could be subject to future reviews, especially if new regulatory frameworks emerge.
For now, the conclusion reached in both the FinCEN case and the 2023 SEC lawsuit provides legal clarity that XRP is not a security. While the debate surrounding the classification of cryptocurrencies continues to evolve, XRP’s legal standing as a virtual currency remains firmly in place.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
Follow us on Twitter, Facebook, Telegram, and Google News
