- The debate on XRP’s and Ether’s regulatory status gets more and more heated as XRP holders arise to defend it.
- Both XRP and Ethereum have gained 40.9 and 13.7 percent respectively in the past week, despite the ongoing regulatory confusion.
The US Securities and Exchange Commission (SEC) is experiencing mounting pressure to give clarity on Ripple’s XRP regulatory status through Ethereum’s point of view. Attorney Jeremy Hogan, one of the most vocal XRP community members, reiterated this question to SEC Chair Gary Gensler tweeting:
“We know you understand Ethereum very well. We also understand you recently said that the U.S. securities laws are ‘very clear.’ Therefore, the millions of Americans who own Ether would like to know the answer to a SIMPLE question: is Ether security? YES. or, NO.”
Of note, Ether’s regulatory status comes to play because it has been compared to XRP in many ways. Interviewed by CNBC’s Squawk Box, Gensler said the law regards anything as a security if it fulfills certain conditions. A token is a security if the seller intends to raise money with its sale, and the buyer anticipates profits based on the efforts of the sellers.
Notably, the above are shared features between XRP and Ether. Ethereum co-founder Vitalik Buterin even once compared the Ethereum ecosystem to XRP’s. Additionally, Gensler once stated that it is potential for both Ether and XRP to be regarded as securities. With this, the SEC is questioned for suing Ripple, and not both Ripple and Ethereum, for the sale of unregistered securities.
Bigger picture on the XRP and Ethereum markets
Another question arises on the utilities of both Ether and XRP. According to Ethereum’s website, Ether is used in smart contracts, making global remittances, and trading NFTs. Decentralized apps (DApps) on the Ethereum network are also powered by Ether.
On the other hand, XRP is utilized in powering innovative technology in cross-border and local payments. An example is the recent implementation of the Japan-Philippines corridor. The Ripple team is now pursuing other use cases as listed on the XRP Ledger website. These are enabling smart contracts functionality, building an ecosystem for NFTs, and developing side chains.
Moreover, John Deaton of the Deaton Law Firm, confirmed XRP being used to “send value” in an interview with one of the XRP holders he represents. He also quoted a supporting March 2021 transcript by US Magistrate Judge Sarah Netburn, saying XRP has utility.
Hopes for “Crypto Gary”
Another crypto community member, Ryan Selkis, founder and CEO of Messari online crypto database tweeted:
“We thought years studying crypto at MIT would make Gary Gensler a reasonable policy expert.”
As Selkis outlines, Gensler was once anti-regulation in the late 90s but reformed later on following the 2008 economic crisis. Gensler thereafter went on to study crypto and blockchain technology. His (Gensler’s) latest concerns about the crypto industry may, however, be due to fear of crypto and DeFi outdoing centralized financial services in the future. Nonetheless, Selkis hopes of Gensler one day instituting “good policy” for the crypto ecosystem.
That said, both digital assets have been gaining despite the whole regulatory confusion. XRP has rallied 40.9 percent in a week, and was trading at $1.03 at writing time, CoinGecko shows. Ethereum has rallied 13.7 percent in a week to trade at $3,210.
