Crypto Mom Hester Peirce: A cryptocurrency doesn’t necessarily have to be a security if its issuer gets sued by the agency
According to U.S. Securities and Exchange Commissioner Hester Peirce, known as “Crypto Mom” for her crypto-friendly approach to regulations, XRP may not be considered a security.
U.S. Securities and Exchange Commissioner Hester Peirce, known as “Crypto Mom”
SEC Commissioner Hester Peirce is calling for greater regulatory clarity, especially XRP
In the interview with Bloomberg, Peirce discusses how the SEC can Regulate cryptocurrency. She also talks about Elon Musk’s influence on crypto and if we’ll ever see a central bank digital currency.
First, host Emily Chang on “Bloomberg Technology” asked Peirce about the regulatory status of XRP. Accordingly, Crypto Mom argues that a cryptocurrency doesn’t necessarily have to be a security if its issuer gets sued by the agency.
Peirce states that an enforcement action means that the property has been sold as an investment contract:
“When we think about a crypto-asset as being a security what, we’re doing is we’re saying it’s being sold as part of an investment contract, which means that there are promises being made around the sale of this asset. It doesn’t mean that the asset itself necessarily has to be a security. It means that it was being sold as a security.”
Although XRP is not mentioned, Peirce’s attitude is clear. Recently, only Ripple and XRP have been implicated in the SEC lawsuit. Therefore, the implicit meaning of the Crypto Mom’s statement clearly refers to XRP.
Peirce believes the SEC needs to provide more regulatory clarity before the agency spends too much time on non-fraud cases. Ripple was brought to court back in May along with two of their senior executives, Chris Larsen and Brad Garlinghouse, over their sale of unregistered XRP allegedly in violation of federal securities laws.
However, the defendants argue that the sale and distribution of their cryptocurrencies is not an investment contract because XRP holders do not have any stake in the company.
The court recently notified the SEC to request a two-month extension of the discovery in the Ripple case, which means the case could drag on until 2022.
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