Dr.T, a prominent member of the XRP community challenged Ari Paul in a Twitter thread about XRP not being a security. Here, Dr.T stated that XRP is not a security because the digital asset was created before Ripple. Furthermore, Ari Paul and a few others engaged in an intense argument on the subject. The original tweet by Dr.T stated:
“I just came across this. I noticed that @AriDavidPaul had liked the tweet as well. You’re aware of these facts I will let your followers know as well: XRP was created before Ripple, so it can’t be a security. Merry Christmas & Happy Holiday season Mike. “
Here, Paul replied by writing that Dr.T needs to be careful with giving “inaccurate” legal advice on the web as he could personally be held liable for it. He also stated that even if Ripple was created five years after XRP, XRP could still be a security. Furthermore, according to Howey Test, which is a test used by the Securities and Commission Exchange [SEC] to check if a digital asset is a security or not, the timing of Ripple incorporation is not an eligible determinant.
He continued to convey that many in the cryptocurrency space have been posting several screenshots of early Ripple PR, Twitter posts and website captures where they created XRP. By this, Paul negated the argument of XRP being born before Ripple. He then opined boldly, indicating that Ripple might have committed early fraud if the claims related to XRP being created before Ripple are true.
To this, ecent, another member of the XRP ecosystem joined the Twitter thread to voice his opinion. In his tweet, he brought the point of “XRP once being a security, but is not any more”. He wrote:
Disregarding for a second the clarity provided by other countries on this topic…Im curious whether the “XRP is a security” camp will be satisfied if the SEC were to say “XRP was once a security but now isn’t” or is blood the only thing that will satisfy those opposed to it?”
By now, the discussion had turned into a rebuttal session where it was Paul’s turn now. Here, he stated that the SEC enforces the regulations. At present, the definition of a security is defined by the 1933 and 1934 Securities Acts Legislation and interpreted by the courts. According to him, SEC’s opinion carries much weight and pragmatism at this hour.
ecent reverted to the above and wrote:
“Thanks but that wasn’t my question. Im curious if in your opinion the CT “XRP is a security” camp will be satisfied with “XRP was but is no longer a security” from the SEC. Will that be satisfactory to you / others in your opinion or will nothing short of criminal charges work?”
According to Paul, his interpretation of such a statement by the SEC will mean what it exactly communicates: a statement of intent by the SEC that is not likely to be prosecuted. He added that such a statement would probably support civil lawsuits.
In his next post, he stated that the key to winning the race is purely intellectual honesty and general clarity in the cryptocurrency space. In his words:
“I don’t like “gaslighting.” It’s up to regulators and judges to enforce laws and regulation as they will.”
On the contrary, ecent believes that intellectual honesty is important indeed. However, he opined that the “XRP is a security” argument is not an honest one, in intent or perspective. He also mentioned that according to the legal clarity established abroad as well as the attempts that are being made to frame regulatory infrastructure for cryptocurrencies, XRP is clearly not a security.
This statement by ecent took a deep hit when Ari Paul re-framed some of the points expressed by the former. Here, Paul questioned the stance of the US on XRP being a security. The tweet read:
“I don’t understand. Are you saying that XRP was a security, but you’re hoping that in other countries it’s not and/or that the US will change its laws to retroactively make the crime of selling an unregistered security not a crime? You’re saying XRP is a US security?”
The debate continued as both the parties stuck to their arguments. Many other members of the cryptocurrency space and XRP in specific joined and submitted their comments on the subject.
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