Ripple CEO Brad Garlinghouse has once again spoken about XRP and why it should not be classified as a security. XRP is the third-largest digital asset by market cap currently trading at %excerpt%.227. The asset has, however, had a rough time with regulatory authorities on the topic of its proper classification. While there has been no official ruling yet, the CEO is unwavering about XRP’s status.The XRP LawsuitFor a while now, Ripple has been stuck in a class-action lawsuit to determine XRP’s classification. In a motion filed in December 2019, Ripple is requesting that the case be thrown out of court because it has no merit. The lawsuit began in 2018 and was initiated by investors and members of the XRP community who are convinced that Ripple sold unregistered XRP tokens to them.Ripple’s motion
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Ripple CEO Brad Garlinghouse has once again spoken about XRP and why it should not be classified as a security. XRP is the third-largest digital asset by market cap currently trading at $0.227. The asset has, however, had a rough time with regulatory authorities on the topic of its proper classification. While there has been no official ruling yet, the CEO is unwavering about XRP’s status.
The XRP Lawsuit
For a while now, Ripple has been stuck in a class-action lawsuit to determine XRP’s classification. In a motion filed in December 2019, Ripple is requesting that the case be thrown out of court because it has no merit. The lawsuit began in 2018 and was initiated by investors and members of the XRP community who are convinced that Ripple sold unregistered XRP tokens to them.
Ripple’s motion for dismissal has now been taken under submission by the U.S. District Court for the Northern District of California. This, unfortunately, means that it might take a lot more time before a final ruling is made by Judge Phyllis Hamilton. The judge was expected to announce a ruling yesterday, Jan 15.
No one knows how long it will take for the case to be concluded.
Brad Garlinghouse Says XRP Is Not a Security
In a recent conversation with CNBC, Garlinghouse has said that it’s impossible for XRP to be classified as security. Absolving Ripple from all related responsibility, the CEO gave a few reasons why it would be impossible to categorize the asset as such.
“I think it’s very clear that XRP is not a security.”
Beginning his explanation, Garlinghouse points out that Ripple and XRP are two different entities and should not be conflated. This is because the asset’s existence is not reliant on Ripple.
“[XRP] exists independently of Ripple the company. If Ripple the company is shut down tomorrow, the XRP ecosystem will continue to exist. It’s an independent open-source technology.”
He also goes on to explain that ownership of XRP does not connect the holder to Ripple in any way. Garlinghouse argues that owning XRP does not give anyone any equity or shares in Ripple the company.
Garlinghouse’s Reaction to a Possible Negative Ruling
In his argument for XRP’s status, Garlinghouse suggests that XRP does not satisfy the qualities of a security. In addition, the CEO is quite confident about what the ruling will declare.
“XRP has a lot of utility and so to me, it’s quite different than what a security looks like, and I think ultimately we’ll find that conclusion.”
Garlinghouse also told the interviewer, when asked, that a security ruling is impossible. He says:
“I can’t think of any argument why XRP would be deemed a security so I’m not too worried about it.”
While Garlinghouse adds that regulation would be great for Ripple, a negative ruling would be very dangerous to the company. If XRP is officially ruled as a security, a panic sale might set in, ending in a precipitous fall for the asset.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.