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XRP is a security; Ripple is committing fraud via non-compliance: Berkeley researcher

Priyamvada Singh



XRP is a security; Ripple is committing fraud via non-compliance: Berkeley researcher
Source: Pixabay

After recent statements made by a former SEC [US Securities and Exchange Commission] employee on the dilemma of XRP being a security or not, Nicholas Weaver, a researcher at the International Computer Science Institute & Lecturer offered his opinion. Weaver, who holds a position at UC Berkeley made a bold remark that XRP is a security and Ripple, the company, is committing fraud via non-compliance. In his tweet, he mentioned:

“Lets walk through the “Howey Test” with XRP (“Ripple”). This is why @SEC_Enforcement needs to come down like a ton of bricks on those behind Ripple the company… XRP is a security, and as such Ripple Inc is committing securities fraud by not following the rules.”

Further, he put the third-largest cryptocurrency in the world to the Howey Test laid out by the Supreme Court in 1946. It is a test that asks four questions to check if an asset is a security, namely, an investment of money, a common enterprise, expectation of profits, and the efforts of a third-party or promoter pushing that profit. Weaver’s second tweet in the series read:

“#1: “Is it an investment of money?” Hell yeah. People put their money in XRP, and literally call it an “investment”. So lets check #1.”

He continued the post and mentioned that XRP also follows the second rule, stating that the expectation of profit exists in the case of the coin. The third factor, i.e., a common enterprise must exist for the investment of money, was also passed by the cryptocurrency. Moreover, the fourth criteria regarding profits was met as well.

Concluding his analysis, Weaver stated:

“In fact, basically any ICO not restricted to accredited investors where there is the quiet part of “yeah, this is for a ‘product’, but you don’t want the product, you can sell the token to someone else” fails the Howey test. Including Ethereum.”

Nouriel Roubini, who has gained much popularity in the blockchain and cryptocurrency space of late, also commented on the  tweets, tagging XRP as a non-compliant security. However, any remarks or replies from the officials of Ripple have not been observed yet.

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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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    October 27, 2018 at 2:21 AM

    this means bitcoin is also a security and so is ethereum this article is useless and he has no clue on whats a security and whats not a security what a joke.

  2. Avatar


    October 27, 2018 at 10:05 AM

    XRP is not a security… Its a utility that Ripple the company uses. If XRP is an investment then so is Bitcoin…..

  3. Avatar


    October 28, 2018 at 3:27 AM

    XRP is a currency and the federal govt just said it was a commodity,
    so i think he needs to read the news before making Dumb statements !

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Ripple’s XRP records relatively low 24-hour trading volume even as prices hold above $0.35

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Ripple's XRP records low 24-hour trading volume; even as coin trumps in third position
Source: Pixabay

The cryptocurrency market has been exhibiting a bullish trend even as Ripple’s XRP steered its way to major declines last week. The digital coin was hovering below $0.40, with very low price action in 2019. XRP was ranked as the third largest crypto-asset with a market cap of $16.03 billion and a price of $0.38, at press time.

However, XRP’s trading volume of $1.28 billion over the past 24-hours painted a different picture. The coin was trading relatively low in terms of its volume.

Ripple’s partnerships and developments did not seem to have had a significant effect on its native cryptocurrency’s trading volume.

The silver crypto, Litecoin [LTC], which is the fifth largest by market cap, recorded a 24-hour trading volume of $4.27 billion, which is nearly four times that of XRP. EOS, the sixth positioned digital asset, stood at a trading volume of $2.04 billion over the past 24-hours.

If the 24-hour trading volume was taken into account, XRP slipped to the seventh position, followed closely by Tron. TRX was closing in with a 24-hour trading volume $858 million.

According to the CoinMarketCap figures, XRP’s trading volume gained momentum on May 14, 2019, registering a massive $5.83 billion in 24-hour trading volume, priced at $0.32, as compared to $1.97 billion the previous day. However, the digital coin endured huge losses over the month as the volume sank soon after. XRP, however, has maintained its price above $0.35.

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