Former SEC Employee Denies XRP is a Security, Claims Its a Currency

A lot of interesting Ripple news appeared lately. However, one thing in everyone’s mind about XRP is whether it’s a security? Given the allegations and legal cases of it being a security due to vested interest by Ripple still seems unclear. However, a former US Securities and Exchange Commission (SEC) member Michael Didiuk stated at Ripple’s Swell conference that XRP is a currency and not a security.

Didiuk’s justifications about XRP being a security made a lot of sense. He cited one of the most known cases the Howey test which justifies if an asset is a security.

Four factors state if an asset is a security according to Howey Test-

    Securities must be an investment of money

    An expectation of profits from the investment

    Profit from the effort of a third party

    Investment of money in a common enterprise

Even if one of the points is lacking it will lead to XRP not being a security, and one point stood out quite clearly according to Didiuk. The fact that XRP can work without Ripple means there is no need for an effort from a third party to promote the cryptocurrency.

Zerocrypted Opinion

The story of the Howey test is quite interesting. In 1946, W.J. Howey sold citrus grove plots to investors who leased it back to Howey who would harvest and sell the citrus products. The case in hand has been an investment contract and hence clarified as security.

Most of XRP’s cases filed of it being a security have already been dismissed such as the one filed by investor Vladi Zakinov due to the case being designated as complex.

Thus Ripple does not seem to do anything similar to such an approach. SEC has proven time and again to be a significant factor in the whole cryptocurrency exchange, and so these comments are bound to help XRP increase in value in the cryptocurrency market. A lot of people made ripple price predictions and we made a small study about it – ripple price study.

Ripple, the company behind XRP, seems to be basking in the glory of it’s successful Swell 2018 conference which included the likes of Bill Clinton. Apparently, 2018 is a great year in terms of ripple news & ripple adoption.

Image Source – Flickr 

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