BankXRP, a well-known figure in the cryptocurrency community, recently drew attention to the ongoing debate over XRP’s classification in the SEC’s case against Ripple. At the heart of the discussion is whether XRP should be considered a commodity, similar to Ethereum (ETH), or if it falls under securities regulations.
Controversy Over XRP's Classification
The SEC’s past decision not to take action against Ethereum despite its initial coin offering (ICO) has raised questions about inconsistent enforcement. Ripple’s Chief Technology Officer (CTO), David Schwartz, responded to these comparisons by emphasizing a key difference: ETH was privately sold before its blockchain existed, whereas XRP had no such pre-sale. These remarks were made in response to Fox Business Senior Correspondent Charles Gasparino, who discussed the ongoing settlement negotiations between Ripple and the SEC. Gasparino pointed out that the SEC is considering whether XRP’s utility and trading characteristics now align more closely with those of a commodity.
David Schwartz's Arguments on Differences
In response, David Schwartz directly challenged the comparison between ETH and XRP. He stated, “ETH was privately sold by an issuer prior to any ledger or blockchain existing. XRP was not.” His argument reinforces the view that ETH had a pre-sale before its blockchain was operational, whereas XRP did not undergo a similar process. This distinction is critical because the SEC’s case against Ripple has largely relied on the claim that XRP’s issuance was akin to an unregistered securities offering.
What's Next for XRP?
The SEC’s inconsistent treatment of XRP and ETH highlights regulatory bias and selective enforcement. However, with former SEC Chair Gary Gensler out of the picture and his war on crypto winding down, many in the XRP army are willing to put the past behind them and work toward a future with sensible crypto regulation. Recent reports suggest that Ripple is negotiating for the removal of the permanent injunction preventing institutional sales. The end of the lawsuit would remove all questions about XRP’s status as a commodity and level the playing field.
The debate over XRP's status continues, compelling various parties to discuss and analyze the legal and regulatory aspects of the cryptocurrency. The developments will be crucial for Ripple and the entire crypto community.
