The legal battle between Ripple and the SEC is getting more and more exciting, with back-to-back revelations in the case making things interesting. The announcement by the former head of the Commodity Futures Trading Commission (CFTC) that followed the revelation of the mystery behind the documents, declaring that XRP “is not a security” has given hope to the cryptocurrency community.
Why is XRP not a security?
Former CFTC chairman Chris Giancarlo discussed the landmark legal battle for cryptocurrencies in a recent interview with Charlie Gasparin. The question on everyone’s mind was asked to the former senior manager; Why does the SEC insist that it is a security when everyone believes XRP is not a security?
Chris answered the question as follows:
“Before the SEC initiated enforcement action against XRP and Ripple, I wrote an article in which we followed the same approach we did when we were at the CFTC, we analyzed the XRP token under the Howie test, and in the article published in 2020 we concluded that it is not a security. And I still stand by that article today.”
$XRP Beside@Ripple— Former CFTC chairman: XRP does not qualify as a security | Fox Business Video https://t.co/WhVXtxFTBI
— Charles Gasparino (@CGasparino) February 18, 2022
Not only that, Chris Giancarlo also wrote a detailed argument, published in the International Financial Law Review, on why the cryptocurrency XRP, officially known as “Ripple”, is not a security.
Charlie Gasparin also asked why Ether was not a security, although at one point they had an ICO to build the Ethereum blockchain. Chris answered that question as follows:
“In my book, I talk about the analysis and work we did with the SEC in 2019, when I was chairman of the CFTC and Jay Clayton was with the SEC. That’s when we concluded that XRP is not a security. And if the SEC wins this case, SEC Chief Gensler needs to go back in time and view Ether directly as a security.
So, the conclusion we have to make from this is that the outcome of the lawsuit will also be a challenging process for the way Ethereum is evaluated for security or not.”
Recently in the case, the mystery behind the two sealed documents was revealed. Critical case evidence shows that Ripple went to great lengths to prevent XRP from being considered a security under federal law.