SEC pointed out that Ripple’s XRP is a security, which caused a wave of cryptocurrency removal from several exchanges
The price of XRP, one of the largest altcoins in the world, has been quite volatile in recent months. Although for a brief period in late November 2020 hodlers expected the price of XRP to rise, all hope was lost after the Securities Exchange Commission (SEC) sued Ripple for an illegal bond offer. Not only did the process negatively affect the price of XRP, but it also questioned the status of the cryptocurrency.
Thanks to the process, many in the community have been asking for more clarity on the matter. This sentiment was echoed by SEC Commissioner Hester Peirce, in her first comments since the process, during a recent interview, when she said that the regulator could do better in the matter.
According to Peirce, enforcement is not necessarily the best course of action to provide legal guidance. Noting that her views were her own and did not represent those of her colleagues at the SEC or the agency as a whole, Pierce also said:
“I don’t want to talk about any particular cryptocurrency, whether in litigation or not with us. But I think everyone needs to look at the facts and the circumstances.
You will often see that the dispute ends in a settlement – sometimes it moves forward and the dispute actually ends in court. ”
Peirce’s mention of an agreement is interesting, especially since the same scenario was recently hypothesized by crypto-lawyer Stephen Palley. In a recent Twitter topic, Palley suggested that Ripple would need to reach an agreement with the SEC because a scenario in which Ripple would win the case and replace “Howey Test”For another new legal test for cryptocurrency is“ delusional ”.
Peirce also said that federal agencies in the United States are not aligned in their views with respect to the status of crypto (and XRP), with the SEC commissioner commenting:
“… We have this very open category called an“ investment contract ”… So, something can be characterized as a thing by another agency, but still be a guarantee according to our rules, and it can be frustrating for people.
That’s why I asked for more clarity, because in fact I think it can be difficult to determine whether something fits the safety bucket or not, and we could do more to provide some guidelines for what that would be. ”
It should be noted, however, that, on the contrary, Ripple supports that the SEC’s decision to sue is an attack on the crypto industry as a whole.
“We have always said that there is a dangerous lack of regulatory clarity for cryptocurrencies in the U.S. – the process has already affected countless innocent XRP holders with no connection to Ripple.”
In addition, Hester Pierce, popularly nicknamed “Crypto-mom”, was also concerned with explaining how inspection actions happen:
“In enforcement actions, it is often a unanimous vote, but sometimes it is not – once the vote has been taken, the dispute moves on.”
Following the accusations of the regulator, several entities have discontinued support for XRP. In fact, on January 5, cryptocurrency manager Grayscale became the last entity to join this movement after revealing that it had removed XRP from its large-cap digital fund.