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XRP is a currency, not a security; former SEC member reveals the reason

Priyamvada Singh

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XRP is a currency, not a security; former SEC member reveals the reason
Source: Pixabay

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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Priyamvada is a full-time journalist at AMBCrypto. A graduate in Journalism & Communication from Manipal University, she believes blockchain technology to be a revolutionary tool in advancing the future. Currently, she holds no value in cryptocurrencies.

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Montana State makes a move in favor of crypto-space as the law recognizes utility tokens as not securities

Priya

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Montana state makes a move in favor of crypto-space as the law recognizes utility tokens as not securities
Source: Unsplash

The United States has always been the highlight of the cryptocurrency space in terms of its regulation, with some states introducing laws in its favor and others deciding to not make an official stance. In terms of laying crypto-friendly rules and regulation, Wyoming has always been one of the most recognized state, while the most hostile one is deemed to be New York.

Colorado made headlines earlier this year, with the Digital Token Act that exempts utility tokens from state securities law being signed by the governor in early March 2019. Notably, in the same month, Wyoming State Senate also passed House Bill 70, Utility Token Bill.

Now, another state has joined the bandwagon by making a similar move. Drew Hinkes, Attorney at Carlton Fields, stated that the State of Montana recognizes utility tokens and exempts it from state securities law. The initial announcement pertaining to this bill was made in February 2019, where Montana House Bill was introduced to “Generally revise laws relating to cryptocurrency”.

The Attorney stated on Twitter,

To this, Caitlin Long, the Co-Founder of Wyoming Blockchain Coalition stated,



“Congrats to #Montana for joining #Wyoming & #Colorado in recognizing that #utilitytokens are not securities under state law!”

Montana also made headlines because of news pertaining to cryptocurrency mining regulation. According to a local news portal, Missoula County commissioners had directed its staff to outline an interim law that regulates the cryptocurrency mining industry. The decision to introduce laws on crypto-mining was made due to concerns pertaining to electricity consumption, with the county prompting the use of renewable energy for mining.

Commissioner Cola Rowley had stated,

“This isn’t throwing ice on economic development or saying that industries aren’t welcome here because we’re an unfriendly environment that hates progress. Cryptocurrency and economic development – bringing businesses here – are two very different things.”





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