Michael Didiuk, a former employee of the US Securities and Exchange Commission [SEC] spoke about XRP, stating that the cryptocurrency is not a security but rather a currency. He also gave an appropriate justification for his statement.
Didiuk mentioned the Howey test laid out by the Supreme Court in 1946 determines whether an asset is a security is based on four factors. The four factors mentioned by the SEC ex-employee were the investment of money, a common enterprise, expectation of profits, and the efforts of a third party or promoter pushing that profit. In his words:
“I don’t think XRP is a security, I think XRP is a currency. The reason why is […] Howey test… It’s a 4-factor test – Investment of money in a common enterprise with the expectation of profits based on the efforts of others.”
According to Didiuk, if one of these factors is absent from the financial entity, then it is not a security. He applied the same to XRP and further stated that the coin will continue to exist and operate without Ripple. Hence, there may not be a third party promoter in such a case, making XRP a non-security asset.
Steven Diep, a popular member of the cryptocurrency space on Diduik’s remark, commented:
“Pay attention to the reaction of the regulators, they laugh. Claiming XRP being a security sounds stupid from the get go”
A Twitter user and a cryptocurrency space enthusiast called Kheysitas also said:
“Smells good for the SEC verdict, dont you think so ?”
Earlier this week, Swell, which is the annual conference by Ripple took place wherein several big personalities made their presence felt, namely, Bill Clinton and Gene Sperling. Here, RippleNet was discussed as a highlighted topic of the meetup wherein the community spoke of the ways the product can be made more consistent in terms of operations. Onboarding and legal clarity were also discussed under the subject.
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