The U.S. Securities and Exchange Commission (SEC) is reportedly considering classifying XRP as a commodity rather than a security. This discussion is said to have emerged amid ongoing settlement negotiations between the agency and Ripple Labs.
XRP's Status Review News
According to insiders cited by senior Fox Business correspondent Charles Gasparino, the SEC is re-evaluating XRP’s utility and market behavior to determine if it aligns more with commodities like ETH. 'One issue that is being weighed by the commission is whether $XRP continues to trade and have a utility that makes it more a commodity and not a security,' the reporter wrote. He also noted that the Ethereum example is key to this investigation, as the regulator is comparing XRP’s trajectory with ETH, which was not subjected to SEC action after transitioning into a commodity.
SEC and Ripple Negotiations Progress
This discussion comes as part of the broader settlement talks between Ripple and the SEC. The financial watchdog previously secured a partial victory against the crypto payments company, obtaining a $125 million fine and a permanent injunction restricting institutional XRP sales. However, sources claim Ripple’s legal team is pushing for more favorable settlement terms, arguing that recent regulatory shifts justify a relook of the penalties imposed against the firm.
Proposals for XRP's Future
Meanwhile, a suggestion by Maximilian Staudinger to designate XRP as a strategic financial asset has added another dimension to the debate. His plan submitted to the SEC's crypto task force outlines how integrating the token into the U.S. financial system could unlock $1.5 trillion in liquidity and save $7.5 billion annually in transaction costs. XRP has experienced mixed market performance: despite a 2.6% increase in the last 24 hours, its 13% decline in the past week indicates underperformance relative to the broader crypto market.
Thus, the situation surrounding Ripple and XRP reflects broader shifts in the SEC's approach to cryptocurrency regulation. Regardless of the outcome of current discussions and proposals, markets remain influenced by these developments, with XRP's ongoing situation being closely watched by industry experts.
