Charlie Shrem is no stranger to controversy. He is an early Bitcoin investor and entrepreneur who is known for being strongly opinionated on social media and became infamous for having been involved with the notorious Silk Road website which landed the millionaire in prison. After his prison sentence, he founded the cryptocurrency advisory service CryptoIQ and the site follows suit with his hard-hitting style and blunt personality.
Recently, Ronald Tichenor of the CryptoIQ blog made a startling accusation with the headline “XRP is a Security, but Ripple Doesn’t Want You to Know.” There has been a lot of worrying about SEC action and how it might all shake out for the cryptocurrency space and XRP’s status regarding whether or not it will be considered a security is one of the forefront concerns among cryptocurrency investors.
Garlinghouse’s argument can simply be summarized with these three points: XRP is decentralized and separate from Ripple the company, no one thinks they are buying shares of Ripple, and XRP solves a problem which inherently makes it not a security.
Tichenor refutes each of these arguments by providing opposing ideas but also using Ripple’s own words against them. He takes a pretty hard stance and points out all the reasons as to why Ripple could easily be labeled a security.
“Ripple created the coin and then sold it to build its platform and fund its operations. That’s a security by the SEC’s definition. It’s a security according to the Howey Test. Ripple’s attempts to distort or otherwise obfuscate this truth betrays the fact that they know it should be a security.”
The harsh take Tichenor gives is actually more constructive than it first comes off as he seems to be offering advice to Ripple rather than rooting for their demise.
“Ripple should be openly acknowledging the perception of a problem rather than being dismissive of it. Ripple should be proactively engaged with the SEC, and the public needs to see that. There are too many ways Ripple could lose right now.”
The major criticism that Tichenor is dishing out is that Ripple is not being upfront about possible coming SEC decisions and that the company should taking steps to communicate with the SEC in an open forum.
The chatter of the SEC’s looming decisions and the possibility of XRP being called a security resulted in an interesting social media exchange between analyst, investor and Forbes contributor Joseph Young and Binance’s CEO Changpeng Zhao.
@iamjosephyoung tweeted, “Coinbase has been listing everything in crypto apart from XRP. It says it may add every asset above a certain level like the stock market but still no XRP. Savage. On a serious note, it’s likely the pending federal court case against Ripple is holding them back for now.”
This tweet prompted a response from none other than @CZBinance, Changpeng Zhao himself. “The court case may take years. But if XRP is ruled as a security, it would seriously hurt a lot of US users, and to a certain extent, other users around the world too. It certainly doesn’t look like a security to me, but that’s just one person’s opinion.”
When a United States SEC official said that ETH was not a security, many people in the cryptocurrency space rejoiced. Now, many are on the edge of their seats hoping that XRP gets a similar nod so that the rule of law in the sector will become more clear.
The post The Cryptocurrency world Deliberates On The Security Status Of Ripple’s XRP appeared first on ZyCrypto.