Several investors are trying to prove in US court that XRP cryptocurrency is a security. The lawsuit threatens the $11 billion market cap cryptocurrency. However, experts believe that the court will take Ripple’s side and that there is nothing to worry about. GR&PR Director of MISSION, Alexei Pospekhov, told Cryptobit.Media everything about it.
Why Ripple is not a security
According to Alexei Pospekhov, Ripple does not have the features of a security. Moreover, the main purpose of cryptocurrency is to facilitate fast and cheap money transfers.
"In general, Ripple is an ordinary utility tokenToken
– is an accounting unit that is used to represent a digital balance in an asset.Details, and it is the closest to this kind. XRP does not have the properties of a security. Ripple is used within its blockchainBlockchain
is a continuous and sequential block chain of information (digital linked list). When building a blockchain, copies of related blocks are simultaneously stored on multiple computers.Details system for transactions," says Alexei Pospekhov.
The expert is convinced that all the hype is simply because Ripple is one of the most popular and successful cryptocurrencies.
"And they try to call Ripple a security because this utility token can be bought on a bunch of exchanges. At the same time, Ripple does not promise to pay dividends to its owners. In general, it does not have any properties of a security. It is just widespread. We can as well recognize Yandex.Money as a security, because it can be bought a lot," adds Pospekhov.
Therefore, he is convinced that the court will take Ripple’s side, rejecting the lawsuit.
Interesting in the section: xRapid payment system. Cryptocurrencies and banking
- In May 2018, XRP investor Ryan Coffey filed his first lawsuit against Ripple in the United States. At that time, he demanded that XRP be recognized as a security and pay compensation for violations of the law on the issue and circulation of bonds.
- More investors soon joined it. In November 2018, their lawsuits were consolidated into one.
- On August 5, 2019, the plaintiffs filed an amendment to the lawsuit and presented the instruction of the Securities and Exchange Commission (SEC) as evidence.
- The SEC issued the instruction a few months before crypto projects could verify that their tokens correspond to the concept of "securities." Plaintiffs also accuse Ripple of violating California law on advertising and fair competition.
- They think that the project "published fraudulent statements about the origin, proposals, and implementation of XRP."
- Ripple has 45 days to present its arguments.
Editor: Jerg Wos