The XRP [XRP] token is under regulatory scrutiny, as its status has not yet been decided by the United States Securities and Exchanges Commission [SEC]. Even as Bitcoin [BTC] and Ethereum [ETH] have been safe from being declared as securities, the status of the third largest cryptocurrency is still mired in confusion.
This is reflected in investor sentiment, as seen when billionaire Steve Cohen invested in cryptocurrency through the hedge fund Autonomous Partners, he did not do so in XRP. On this, Arianna Simpson, Managing Director at the fund, stated:
“I have a lot of concerns about the level of centralisation there, and I have regulatory concerns if what they have issued is a security.”
While many experts have offered their opinions on the matter, the latest to do is Anatoly Castella, the CEO of Elpis Investments. Castella said that the XRP token belongs to a category he calls ”digital fiat”, stating that XRP falls short of the “purest interpretation of cryptocurrency”.
“Ripple [sic] resembles a fintech platform combining the best elements of fiat money and blockchain cryptocurrency. It should be considered ‘Digital Fiat’, not a cryptocurrency.”
Castella stated that these digital fiats exist in a state of regulatory ‘limbo’, as there is no sustainable ecosystem. He said:
“This will ensure that ‘real’ cryptocurrencies like bitcoin will not be damaged and misunderstood by these start-ups adopting the wrong regulatory approach from the outset.”
It is interesting to note that Ripple, the company, has adopted an open stance to regulation since its genesis. This is evidenced by the multiple statements made by Ripple staff, one such comment was from Asheesh Birla, he stated:
“Maintaining local accounts is a huge pain point for financial institutions…If you want to work with those financial institutions, you have to provide a product that can comply with local regulation and compliance information.”
Castella made a prediction for the price of XRP if it is declared a security, stating:
“If the SEC categorises Ripple [sic] as a security, we will experience in the short term a big dip in its market value. In the long term it will simply become a digital asset owned by institutional investors.”
The ‘expert’ also spoke about the architecture of the XRP Ledger, calling it centralized. He said:
“Ripple has no mining or miners whatsoever. Instead, transactions are powered through a ‘centralised’ blockchain to make it more reliable and fast. XRP was mined all at once by the parent company – Ripple Labs Inc – with a majority of the cryptocurrency held by them.”
The post ‘Expert’ states XRP [XRP] is a security, Ripple adopted a “wrong regulatory approach” appeared first on AMBCrypto.