This could be the key distinction between XRP and ETH in the securities story with the SEC
In a recent tweet, Charles Gasparino of Fox Business stated that sources in the U.S. The Securities and Exchange Commission (SEC) told him that ETH is not considered a commodity by the regulator because the blockchain’s building infrastructure has been working for many years. Meanwhile, XRP is the opposite.
Source: Charles Gasparino
SEC vs. Ripple – XRP: This may be key reason why ETH was given free pass
On the other hand, Ripple still relies on XRP to fund its business. Gasparino says that this is why the SEC alleges that the cryptocurrency is unregistered security.
Furthermore, the source from the SEC argues that the logic of the agency’s for Ripple is that the company’s infrastructure is still being built out, so XRP – the token used to finance the thing – is considered a security. Meanwhile, Ethereum infrastructure is built out and has been for years thus, and it’s a commodity.
In March 2020, Ripple CEO Brad Garlinghouse told the Financial Times that the company wouldn’t be profitable without selling the token. According to the SEC’s complaint, Ripple stated in a 2013 promotional document that its business model was predicated on the success of XRP.
It seems that Gasparino’s explanation did not satisfy members of the XRP community. Many of them take issue with the “build-out” word because Ethereum is currently in the process of transitioning to the Proof-of-Stake model. Ripple, as well as the XRP community, are demanding answers about the SEC’s internal deliberations on digital assets.
Gasparino then further stated that the SEC vs. Ripple could decide the future of the agency’s ability to regulate cryptocurrency, and it might not end well.
As AZCoin News reported, the removal of William Hinman, the former top official of the agency who claimed that ETH is not security during his infamous 2018 speech, took place on July 27. In his testimony, Hinman revealed that he was indeed warned. Ripple on XRP and advised the company to pause its sales.
The SEC has shied away from Hinman’s speech, with Ether’s security status still in limbo. In August, SEC Chairman Gary Gensler declined to comment on whether the cryptocurrency is unregistered security.
Read more:
- Over 117 Million XRP Have Been Shifted By Binance, Bitfinex And Some Other Large Crypto Exchanges
- A Recent SEC Letter Sheds Light On Some Of The Key Ripple And XRP-Related Meetings Of Its Staff