Ripple\u2019s chief technology officer David Schwartz says the company\u2019s XRP<\/a> token is a \u201ccommodity\u201d despite an ongoing legal dispute over its status.<\/p>\n Schwartz claims<\/a> XRP fits into the definition of a commodity under US federal finance rules ahead of a possible legal ruling this year on whether the token was illegally traded as an unregistered security.<\/p>\n \u201cXRP is a raw good that trades in commerce and one XRP is treated as equivalent to every other XRP. That\u2019s pretty much the definition of a \u2018commodity.\u2019 No part of XRP\u2019s value comes from anyone else\u2019s legal obligations to XRP holders.\u201d <\/em><\/p>\n The U.S. Securities and Exchange Commission (SEC) has sued Ripple alleging XRP is a security.<\/p>\n Schwartz also states<\/a> the government is inconsistent in its characterization of digital assets, pointing to a lawsuit the U.S. Commodity Futures Trading Commission (CFTC) recently filed against crypto investor Avraham Eisenberg where it calls certain digital assets commodities.<\/p>\n \u201cThe government describes tokens as commodities every time it\u2019s in their interest to do so\u2026<\/em><\/p>\n Just to be clear, I\u2019m not claiming this means anything other than that it\u2019s reasonable to describe tokens as commodities. One can sell a commodity with an investment contract and that\u2019s an offering of a security.<\/em><\/p>\n I agree that there are new risks to consumers created by digital currencies. I think the worst of them are addressed by existing laws such as those prohibiting fraud. You can see lots of CFTC and DOJ [U.S. Department of Justice] actions that don\u2019t rely on securities law. Congress can also pass new laws.\u201d <\/em><\/p>\n Ripple CEO Brad Garlinghouse recently said<\/a> he does not believe the payments firm will reach a settlement with SEC. He said a settlement would only happen if the SEC takes the position that XRP is not a security.<\/p>\n The outcome of the case is likely to have significant implications<\/a> for the crypto space, according to Ripple\u2019s general counsel and crypto legal expert Stuart Alderoty.<\/p>\n \u201cNo matter how you dissect it, the experts agree \u2013 the outcome of the Ripple case will likely have a significant impact on crypto\u2019s future in the US.\u201d<\/em><\/p>\n Don’t Miss a Beat \u2013 Subscribe<\/a> to get crypto email alerts delivered directly to your inbox <\/span><\/em>
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