Michaela
The U.S. Securities and Exchange Commission (SEC) has reportedly been considering classifying XRP as a commodity amid ongoing settlement discussions with Ripple Labs, the company behind the digital asset.
Fox Business senior correspondent Charles Gasparino revealed in a post on X that discussions between the SEC and Ripple Labs include evaluating whether XRP should remain available for trading and whether its utility aligns more closely with that of a commodity rather than a security.
Gasparino stated that sources have pointed to Ethereum (ETH) as a key example in the ongoing discussion over XRP’s classification. According to Gasparino, the creators originally issued ETH through an Initial Coin Offering (ICO) that had characteristics similar to those of XRP at its launch.
The argument being considered, he noted, is that both XRP and ETH funded the development of their respective platforms. However, while Ripple faced legal action from the SEC, Ethereum did not—largely because ETH later transitioned into a commodity in the eyes of regulators.
“What is being discussed now is the comparison between the 2 cryptos. The SEC [believes] ETH trades as pure commodity. They are trying to determine if the commission can make that case [with] XRP,” Gasparino wrote.
What Did Ripple Labs Do Differently?
Ripple did not conduct an ICO for XRP. Unlike many cryptocurrencies that launched through ICOs—where tokens are sold to investors to raise funds—XRP was pre-mined. All 100 billion tokens were created at the outset in 2012.
Ripple Labs retained a significant portion of XRP and gradually released it into the market. The company has repeatedly stated that it did not distribute XRP as an investment contract. Instead, it distributed XRP as a means to facilitate cross-border transactions within its payment network.
This development emerges as reports indicate that the SEC and Ripple have made progress toward reaching a resolution.
In addition to discussions surrounding XRP, the delay in finalizing a resolution is linked to Ripple Labs’ legal team requesting modifications to the August 2024 district court ruling. The ruling imposed a $125 million fine on the company and issued a permanent injunction prohibiting the sale of XRP to institutional investors.
Read More
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- Ripple ‘Pushed’ for Solana’s Inclusion in Crypto Reserve – Reports
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
