The future of XRP, the cryptocurrency once issued by US fintech firm Ripple, has been shrouded in uncertainty, and recent revelations suggest that this confusion may stem from within the Security and Exchange Commission (SEC) itself. An excerpt from what is believed to be an SEC email, released by pro-Ripple lawyer John Deaton on Twitter, has sparked further discussion about whether XRP should be considered a security under the SEC’s definition.
According to the disclosed email, the SEC might have been aware that XRP did not pass the so-called Howey test, which is utilized by the government to determine whether an asset should be regulated as a security or not. The email stated there were “reasonable grounds to conclude that XRP does not satisfy all elements of the Howey Analysis and is therefore not a ‘security’ for purposes of the federal securities laws.” Additionally, the author opined it is “more likely than not” that XRP is not a security, and therefore will “not be subject to regulatory oversight by the SEC.”
The contents of this email have generated widespread speculation regarding the true nature and classification of XRP. On one hand, the alleged internal communications at the SEC suggest the agency was aware of XRP’s potential exclusion from the Howey test criteria. On the other hand, the authorship and context of these statements remain unclear, casting doubt on their credibility and relevance in determining XRP’s status.
Adding to the controversy, Deaton called the revelation “HUGE” on Twitter. Bill Morgan, another lawyer in the pro-Ripple camp, commented that the referenced text was most likely written by an SEC attorney, considering the involvement of several agency personnel in the case. In a subsequent tweet, however, Deaton questioned whether the text was actually written by an SEC official, as Ripple has never utilized it in their defense.
This intriguing back-and-forth seems to indicate that, even within the SEC, there may not be a clear consensus on XRP’s status as a security. If this is indeed the case, it raises further questions about the legitimacy of the SEC’s approach to regulating cryptocurrencies and the consistency of their decision-making process. Supporters of Ripple and its associated cryptocurrency will likely keep a close eye on developments related to this email, as they could have significant implications for the future of XRP and its place within the ever-evolving world of cryptocurrencies.
Source: Cryptonews
