Ripple gains an advantage over the SEC as the latter admitted to not telling any 3rd party that XRP was a security. Now, this is a very big deal because if they haven’t told anyone about this before, what is the point of having this lawsuit. Reports also suggest that many people emailed SEC before this lawsuit asking if XRP was security but didn’t get any reply for obvious reasons. This also shows that the SEC likes to keep everyone in the dark, which is not good.
Security vs token vs coin
While we look at the SEC receiving blows from XRP in the court, let’s look at what the lawsuit is for. When we talk about a coin, it is those which can be treated as money. In other words, we could also say that any cryptocurrency that has its own blockchain is called a coin. For example, we can call Bitcoin, Ethereum a coin but not the tokens built on top of their blockchain. Those are called tokens, and their primary goal is to provide some form of utility to the users. These tokens provide specific services and can be used only for those. And in case you want to do something else with such tokens, you have to exchange them for a coin.
Now finally we have security which is like the most important topic of this discussion. Security is generally linked with an external asset. This is comparable to stocks that provide you ownership of a company. So, when XRP was considered a security by the SEC, it means the authorities claim that their token is not providing any utility and is obviously not a coin.
SEC is creating a mess
A few days back, the SEC also got their hands dirty with Coinbase. They warned them about a lawsuit which they would file in case Coinbase launches their lending product. While other exchanges already have the same option, Coinbase is getting restricted. This is because the SEC claims it to involve security, but they are not giving their logic behind the same.
What are your thoughts as Ripple gains an advantage over SEC after their recent statement? And do you think Ripple can win this? Let us know in the comments below. Also, if you found our content informative do like and share it with your friends.
Also Read: South African exchange limits withdrawal to deal with illicit activites
