Ripple NEWS: XRP will take ‘big hit’ on SEC ‘security’ verdict but ripple can ‘cope’

The XRP token connected to blockchain payment firm ripple is in the centre of a debate in the US over whether securities laws apply to cryptocurrencies.



Bitcoin and ethereum, the largest cryptocurrencies by market capitalisation, are generally not considered securities, however the XRP token, described by Ripple as an “independent digital asset” has been embroiled in the paranoia because ripple – a technology company – still owns over 60 billion of the 100 billion XRP tokens ever created.

In short securities are ownership shares that need to be registered. An ongoing lawsuit in the US claims that XRP was “created it out of thin air” as part of a “never-ending initial coin offering” used to “raise “hundreds of millions of dollars”.

Ripple’s chief market strategist, Cory Johnson, told CNBC in April: “We absolutely are not a security. We don’t meet the standards for what a security is based on the history of court law.”

CEO Brad Garlinghouse added in June: “I think it’s really clear that XRP is not a security,” adding that XRP’s blockchain, or public ledger, “exists independent of ripple.”

However investors remain unconvinced that ripple’s problems can be so easily dismissed.
Olymp Capital CEO Christophe de Courson told Express.co.uk that the process could be painful.
He said: “If the SEC states XRP is a security, the coin will definitely take a big hit because it is listed on all the major exchanges – except Coinbase – and moreover, I would expect a strong negative reaction of the global crypto-market for such news.

“The coin will not be the only one to be hurt from such a decision, indeed affiliated ripple corporate entities will also suffer. It is interesting to note that several lawsuits targeting ripple entities already claimed that XRP was a security.

“On the other hand, XRP is not needed when using xCurrent, the product that gives banks ability to move efficiently money across border. xCurrent being the most used ripple’s product, I think that even if a classification of XRP as a security will be painful for ripple , they could cope with it.”

XRP holders are most concerned by the token being ring-fenced from other competing cryptocurrencies which began with speculation over why XRP has not been added to popular exchange Coinbase.

Ripple and XRP remarkable journey from obscurity to $3.40 back down to today’s price of $0.45 could potentially change direction with concern over its centralisation potentially excluding XRP from entry into a price boosting regulatory framework.

Anatoly Castella, CEO, Elpis Investments told Express.co.uk last week that ripple’s XRP is set to miss outbecause it is not a “Digital Fiat”, and not a “real” cryptocurrency.
Mr Castella warns that XRP falls short of the “purest interpretation of ‘cryptocurrency’.”
He said: “Ripple resembles a fintech platform combining the best elements of fiat money and blockchain cryptocurrency.

“If the SEC categorises ripple as a security, we will experience in the short term a big dip in its market value. In the long term it will simply become a digital asset owned by institutional investors.”


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Early Investing In Ripple (XRP) Made Him A Billionaire!!

The Late Matthew Mellon was one of the early believers and adopters of cryptocurrencies. He invested heavily in Ripple (XRP) by putting down $2 Million to invest in the coin. That investment would be worth around $1 Billion when XRP peaked back in January at around $3.65. His story is one that is worth studying for it proves that following your gut instinct, as well as doing proper due diligence before investing in any cryptocurrency, can yield beneficial results for an individual.


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When interviewed back in February by Forbes Magazine, Mr. Mellon had this to say about cryptocurrencies:

“Crypto is scary and dark. It’s anti-America. I am pro-America, pro-business and pro-bank. That’s why I went with Ripple.”

In this statement, Mellon justified his choice of Ripple for it was an American based company he could trust. He had done his research and also determined that the product evident in the Ripple technology, would revolutionize banking from within the financial system. He knew Ripple was a gold mine with a solid product at hand.
When his XRP investment was valued at its peak, Mr. Mellon would discuss how his family had doubts about his idea about investing in Ripple. This is a similar reaction many crypto traders face when trying to explain their choices of investing in the crypto-verse, to family and friends. Matthew Mellon would tell Forbes that:
“It’s $1 billion virtually for free. I actually have earned it because I was the only person who was willing to raise his hand. My family thought I was insane when I knew it was a home run.”

Mr. Mellon would later die unexpectedly in April this year, leaving a vast amount of that XRP, possibly lost in cold storage. He was attending a drug rehabilitation program in Cancun, Mexico when his death occurred. His death has since raised questions about the accessibility of the XRP he owned since he was known to have kept his digital keys in cold storage in other people’s names across the United States.

His story is very unique for it shows how early research, belief in a project and investing, can pay off tremendously. We can also learn about how to keep our security keys safe and also on how to start thinking about how they can be accessed by our loved ones when we pass on.


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Reasons why this might be the year for Ripple (XRP)

Ripple has been characterized as being a cryptocurrency that is in the spotlight constantly. It has slowly become a very important coin because of its technology and astonishing features, and to say the least, this could definitely be the year for the crypto to hit never before seen performances.


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As of today, the token is ranked as the number 3 by Coinmarketcap, with a value per coin of $0.55, and a total market capitalization of $21,908,093,615. The cryptocurrency has managed to deploy the most solid partnerships in the industry, being at the moment the only platform based on the blockchain being adopted by bank entities around the world.

Understandably, the expectations are certainly very positive around the likely results for the token. Here in this post, I’ll try to mention the most notable ones and the reasons why I believe Ripple (XRP) will conquer the world this year!

The answer to major problems of the financial industry
If there’s something to highlight about Ripple (XRP) that differentiates the coin from the rest of the cryptocurrencies is the solutions it offers regarding two of the main issues in the financial industry, the speed in transactions, and the fees charged per operation.
In this matter, Ripple has shown a very solid platform offering operations that last 3.3 seconds only (the time Ripple needs to complete a transaction, usually), and one of the lowest fees per transaction in the market ($0.0004 per operation).

Current listings of the coin
Ripple has managed to appear listed in several exchanges in the industry. In fact, it was recently added to the UK-based banking application Revolut. The same way, another UK-based LMAX Exchange recently listed the coin, a fact that increases, even more, the possibilities of Ripple to attract institutional investors, which is the target of the trading platform.

Additionally, the awaited and long-promoted SBI Virtual Currencies exchange, has decided to support the crypto, and if all goes as the CEO of SBI Holdings, Yashitaka Kitao forecasted, then it definitely represents a huge opportunity for the coin.

xRapid experiments
xRapid is the incredible solution Ripple has developed to treat liquidity issues in the industry. This cutting-edge product has been tested recently, showing astonishing results with respect to the reduction of costs and times in transactions.

This way, Ripple found a reduction from 40% to 70% in the cost of a transaction by just eliminating the middleman figure, and in addition, the previous time it took to transact (1-2 days), was reduced to 2-3 minutes.

This strategic alliance can definitely shoot Ripple (XRP) to the moon, as it represents a huge milestone being the first time the blockchain-based platform that is used in the region.

Furthermore, rumors have grown regarding the possibilities of Amazon adding Ripple (XRP) as a payment method to its platform very soon. Although none of this has been confirmed yet, we believe it is a possibility that may open the horizons for the coin even further.
So, Ripple’s ability to solve real problems of the financial sector, current listings, xRapid and strong partnerships, it all backs up the fact pretty well that 2018 could be the year for it. And yes, we are approaching the middle already, but the coin hasn’t done that bad so far either, and there still is time left for it to ‘dent’ the market positively.



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Ripple (XRP) might not get mass adopted, and here’s why!

 


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Ripple’s XRP crypto coin went all the way up to $3.50 this January thus achieving its historic peak value propelled by rumors of an imminent Coinbase listing. That brought it a lot of attention (CNBC even published an investor guide for acquiring XRP), but it also created controversy about the corporation, its marketing strategy, the token, and its real-world usefulness.

What does Ripple mean, anyway?
Ripple is not a monolithic notion. It actually encompasses three different entities that, while closely linked to each other, are quite different, and if we’re going to understand Ripple’s current situation we need to know what the differences are. First of all, there’s Ripple Inc., based in California. This is the corporation that is behind all the technology and the coin.

Then there’s the Ripple Protocol which is a blockchain based technology designed for inter-bank transfers and communications. The third concept related to Ripple is its coin, called XRP. That’s the company’s cryptocurrency.

The thing to keep in mind here is that Ripple’s banking platform does not require for its users to adopt the XRP coin in transfers, as it works using other currencies as well. But if they do adopt Ripple’s coin, things run faster and cheaper.

XRP is needed to pay the Ripple Protocol’s fees or as a bridge currency between different banks or within the same bank doing an international transaction.

The Ripple Protocol is sound and could really supplant the traditional way in which inter-bank operations work, which would have a substantial economic impact on the world. But that’s all about the protocol, not the coin. It remains unclear how big a role the XRP will play on this if any at all.



How banks do the trick
Let’s have a look at the Ripple Protocol. To understand it, we need to know how banks work in the 21st century. Let’s say I go to Banco Santander, which for example is my personal bank, and I deposit $10 into my savings account. By doing this, I am loaning $10 to Santander with the understanding that I will be repaid any time I ask. So Santander adds a $10 entry to their liabilities.

Let’s say I transfer that same money to a friend who also does his business at Santander. The bank’s balance doesn’t change, all that happens is that the same liability is now owed to him instead of me. The bank, of course, keeps an internal ledger that records all these debts to its clients.

If I want to send money to somebody who banks with a different institution, things get a bit more complicated because both banks need to keep their ledgers up to date and, at some point, my bank is going to have to make an actual payment to his bank.
Every country’s big players usually know each other well and trust each other (or at least work together all the time), so they are willing to make things faster for clients by accepting to issue IOUs and settling them at a future date.

That is possible as long as the banks trust each other, but they don’t always do. In that case, clients must wait for money to change hands among them or to be routed by a third party that is trusted by both banks. This takes time.

Now let’s say that I want to send funds to a friend who lives in Taiwan and our banks do not trust each other. Maybe they’ve never even heard about each other. This is the most frequent scenario in international transactions. In this case, the money will follow a difficult route that will include several other institutions; it’s expensive, slow, error-prone.

It also needs for my bank to have my friend’s currency in reserve and for my friend’s bank to have my currency in reserve too. This increases both banks working capital needs, which is not great news for either bank because this kind of reserves are useless to them until somebody asks for a transaction between them which could be not a very frequent event.

The Ripple Protocol in a nutshell
In the Ripple Protocol, all participating banks are included in a single ledger (the Ripple Ledger). This makes things considerably faster and also means that these banks don’t need that frozen working capital anymore.

The network finds the shortest possible path for the money to follow by determining trust lines between the network. Because it’s based on a blockchain, it creates a distributed ledger globally that keeps the record of every transaction.

In these way, the decentralized ledgers allow banks to exchange IOUs to be settled in the future, and they can do it using fiat money, XRP, or any other digital asset.
While XRP doesn’t necessarily need to be the means of exchange, it’s still required to pay the network’s fees, and every user must keep at least 20 XRP tokens in their digital wallets if they want to transact.

So what’s the point in keeping XRP tokens?
So once you’ve understood the protocol you must have realized this: however widely adopted the Ripple Protocol becomes, that doesn’t mean that XRP’s value will grow proportionally, which is why it’s so important to understand that coin and protocol are different animals.

XRP’s value will go up as its demand grows. That demand would come as banks use it as a bridge asset within the Ripple network to settle their business. But because XRP has shown some volatility, participants are not that sure they want that additional risk.

They know that using XRP in this way makes the network work better for them by reducing costs and increasing transaction speeds. But even with those incentives in the mix, it still makes better sense for them to use a more stable cryptocurrency to settle their debts.
As transactions within the net need fees to be paid in XRP, the demand will increase for sure as the protocol’s adoption increases, but this is going to be a very slow process, best case scenario.

As the use of decentralized exchanges becomes more common, it makes it easier to trade in all kinds of tokens quickly and safely, exposure to volatility decreases. This makes XRP something of a third wheel. It just adds friction to the user experience, and you can avoid it but only if you just have the funds, you need to complete the transaction.The Ripple Protocol is actually a good one, so it makes things quicker and cheaper for banks even if they don’t use XRP to transact. Yes, if they do adopt XRP things do improve. But are they so much less expensive and quicker so the additional risk is worth taking?

Ripple allows settling accounts in many different currencies both fiat and digital. So the chances are that some fiat currency will be the main bridge for some time yet and that members will adopt a cryptocurrency (a very stable one) in the long-term.

Don’t try to run before you can walk
As things stand right now, it seems that banks and financial institutions’ current priority is not to have increased transaction speeds.

When you upgrade an internet user from dial-up internet to WiFi, they see the benefits immediately, but it will also make it harder to sell them a much faster service too soon, or at least until they’ve learned to use their new WiFi to its maximum.

Something like that also happened when cars appeared in the market. Horses were still around for a very long time, and one of the priorities back then was to make sure that the new machines did not scare the animals.

Banks are usually very conservative institutions in which inertia and skepticism hold changes back. They will make sure they can walk before they even consider attempting to run. Just adopting the Ripple Protocol (let alone the coin) is already a significant change for them.

Even Ripple’s Chief Cryptographer, David Schwarz, has made it clear that the Ripple Protocol is powerful enough to work without XRP. Even without any blockchain at all. It improves international payments so much over the current legacy systems that banks will adopt it even if, in the end, fiat money keeps moving just as it does right now.

Mr. Schwarz also said that the tricky bit in all this is to get banks to use the blockchain but that it’s not the blockchain per se that makes the network convenient but the integration with current systems, compliance, and governance. And that’s what Ripple does. But if transactions costs go down even by a cent by adopting XRP, it still makes sense to adopt it, according to him.

In his opinion, Ripple’s and XRP advantages speak for themselves. If he’s right, XRP’s value will increase very much very quickly.

XRP: The skeptics
Skeptics think that XRP shouldn’t exist in the Ripple Protocol at all. They just see no reason for that other than to make users buy XRP tokens thus inflating XRP’s price in the open market without really adding any value.There are 100 billion XRP tokens in existence, and they are all already mined and ready to sell as the mining process was completed before the protocol was launched. Last December Ripple committed to storing 55 billion XRP tokens in a crypto-safe escrow account to make everybody know that the token’s supply is not at risk. A billion XRP are released from this vault on a monthly basis for Ripple to use as they deem fit. So far, it’s been mainly to create market incentives and sell to institutional investors.

Ripple has used those funds responsibly so far. They’ve sold about 30% monthly, and any XRP remainings go into a new escrow account.

It currently seems that XRP’s prices are inflated. Investors speculate that XRP will indeed become a global currency that will facilitate transactions between banks. Such event will disrupt a worldwide trillion dollar industry, and XRP would be at the heart of it. This is the belief (or hope) that is driving XRP’s price up.

But this doesn’t need to happen because the Protocol doesn’t really need to use the coin, except for fees, and fees will not create such high demand. Also, banks will not go for XRP until they are sure that it’s a stable asset.

We are quite optimistic about Ripple as a project. Many banks are adopting it, and that’s just a significant step for the whole blockchain industry. It will revitalize an industry that sorely needs it, but that’s the Protocol. On the other hand, to buy and keep XRP tokens as a retail investor, in long-term, doesn’t make much sense as yet. Wait a bit further at this stage, judge, and then invest (if you want to)!


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Deciphering the $334 Ripple (XRP) price prediction – Is it realistic?

There is a lot of excitement around Ripple (XRP) in the moment. With the high rate of Ripple (XRP) adoption at the moment, experts believe that this crypto could emerge as the top crypto in a few years. Of all the many predictions that have been made about Ripple, I have come across one that may look outrageous, but it actually makes mathematical sense. According to this prediction, Ripple will be worth around $334 in around 3 years.
Before you think this valuation doesn’t make sense, let’s break it down, then you will realize that there is a good chance that this analysis may not be as illogical as it might seem at first glance.

First the analysis takes a look at the scope of the market that ripple (XRP) is looking to disrupt. Ripple intends to solve the problem of costs and delays that banks experience in foreign exchange transactions, when using the SWIFT system. This is a 24 trillion market and Ripple can help cut up to 40% of the in this market. Now, given that ripple will make money through transaction fees paid in perpetuity by the banking system, just a slight market share of this market will give Ripple a huge fundamental value boost.

According to the $334 ripple prediction, if Ripple were to get just 10% of this $24 trillion market, and make around 10% in fees, this amounts $334 per XRP when worked backwards, using the net present value method. So is this tenable? The mathematics around this is correct. Actually, based on the same line of thought, one can conclude that Ripple will be worth much more in the future. That’s because Ripple is almost assured to capture way higher than 10% of the global banking industry. In fact, if Ripple can save banks up to 40% in forex costs, no bank would want to be left behind. Getting left behind would mean losing clients to other banks, and that’s a costly mistake that no bank can take.


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Second, the $334 analysis also makes use of the assumption that Ripple will never burn coins. However, in reality, Ripple intends to burn coins per transaction in the long-run. As such, the more banks adopt Ripple, the lower the number of XRP that will be in circulation going into the future. A lower number of Ripple coins when combined with a growing share of a $24 trillion market, will easily see Ripple (XRP) surpass the $334 mark. As a matter of fact, if Ripple were to be adopted by the entire global banking sector, it could lead to a massive coin burn that could easily take Ripple to over $500.

The $334 ripple analyst also argues that once the financial system starts using Ripple enmasse, exchanges too will start stocking up on Ripple, due to surging volumes. This makes sense because as demand increases, exchanges would quite naturally hold more Ripple thus pushing up demand. Ripple would also be added to more exchanges, thereby opening up new demand avenues for Ripple XRP.

We can, therefore, conclude that the idea of $334 Ripple may not be as outrageous as it sounds. Besides, the crypto market is not known for its rationality. We saw projects that have no working products, mere concepts, gain by hundreds of percentages in 2017. There is no reason why something as disruptive as Ripple (XRP) can’t gain by unimaginable margins. However, in the same breadth of crypto irrationality, it is important to invest what you can afford to lose. Don’t lose your shirt!


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Ripple: The Banker Coin Is Dead

Many people in the cryptocurrency community are extremely anti-establishment, and believe that many cryptocurrencies such as the privacy-focused ZCash (ZEC-USD), the contract-focused Ethereum (ETH-USD), and the “daddy of them all” Bitcoin (BTC-USD) will eventually make fiat currencies obsolete.

As we saw in the crypto bull market of 2017 however, many big banks such as Citi Bank (NYSE:C) and Goldman Sachs (NYSE:GS) have been doubling down on cryptocurrency by investing in a bank-backed coin known as Ripple (XRP-USD).

Ripple, or as its critics call it, the “banker coin,” has a history of causing controversy… and while this controversy may be legitimate or simply meaningless drama, the coin isn’t looking too bullish.

Descending Trendline
After Ripple topped out at nearly $3.30 on the first of January, we saw it lose over 80% of its value in just under a month. This begs the question, then – are we bound to see losses like this any time soon, or has the cryptocurrency shrugged off its bearish tendencies?
One bullish sign that Ripple has shown is its recent breakout of a descending trendline. On April 12th, roughly one month ago, the cryptocurrency broke out of a descending trendline that had kept it in a bear market for nearly four months. See the image below.
Many were convinced that Ripple was destined for a surge after this breakout, but despite this the banker-backed cryptocurrency doesn’t seem very bullish.
It’s encountered stark resistance at the $1.00 mark which it’s tried to break through several times, and while this may be indicative of an ascending triangle, preliminary analysis shows it to be bearish.



Stochastic RSI Analysis
While the resistance at $1.00 may appear bearish, the stochastic RSI analysis isn’t quite as gloomy. When looking at multiple time frames, it seems that Ripple may be due for at least a small rally.
Looking at the picture below, we see the Stochastic RSI looks fairly bullish. The Stochastic RSI, which measures the relative lows and highs of an asset’s price, portrays that we’re long overdue for a surge. As you can see, the lines are about to cross over as well, which is a bullish sign.
The weekly Stochastic RSI, however, tells a different story. Looking at the chart below, you can see that a decent surge has already happened on a longer time frame, and taking note of how the lines are on path to cross over, appears that we may be overdue for a sharp dip in prices.
So what’s one to make of this? Well, we will have to look at other indicators such as the MACD to get a more accurate prediction, but the technical analysis and Stochastic RSI aren’t looking too pretty.

MACD Analysis
The MACD, which measures the average momentum over a period of time, also tells a very bearish tale. Looking at the image below, we see that while Ripple did experience a slight increase in momentum, which caused the descending trendline breakout, it’s on path for another drop.
Looking at a longer time frame, the 1-week MACD tells us a similar story. It appears that this banker-backed coin may have been way overbought, and even more overhyped.
Again, looking at an even longer time frame, we see that there’s slight signs of a crossing over, but noting that the MACD hasn’t even gone into the negative ranges yet, this crossover, if it even happens in the first place, likely won’t be much to bat an eye at.

While mainstream media sources such as CNBC and Bloomberg (this link is pay walled) went full on gung ho in promoting Ripple, this “banker coin” as it’s been named doesn’t seem to have too bright of a future.
The chart analysis, as well as multiple indicators paint a very clear picture: While this cryptocurrency may be due for a small bump in price over the next few weeks, it certainly doesn’t seem to be going anywhere anytime soon.
This in conjunction with the recent lawsuit Ripple was hit with leads us to assume a not-so-bright future. While AMEX and other banking institutions have tried to make this cryptocurrency the official banker coin, it seems that most believe a “banker coin” defeats the whole point of cryptocurrencies.


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Investor Sues Ripple Alleging ‘XRP Is A Security’

An investor who claims they lost money buying and selling the cryptocurrency XRP has filed a class action lawsuit against distributed ledger startup Ripple, alleging that the company violated state and federal securities laws.

Ryan Coffey, represented by San Diego attorney James Taylor-Copeland, filed the suit in the San Francisco County Superior Court on Thursday. Coffey is seeking damages “on behalf of all investors who purchased Ripple tokens (“XRP”) issued and sold by Defendants,” naming Ripple, XRP II (the company’s registered and licensed MSB), CEO Brad Garlinghouse, and 10 unnamed parties.

Ripple Labs and Garlinghouse have come under increased scrutiny in recent weeks over the degree of association they have with XRP, a cryptocurrency that surged to a market capitalization of over $140 billion in January, but has since fallen below $35 billion. Ryan Zagone, Ripple’s director of regulatory relations, told a UK parliamentary committee Tuesday that “there’s not a direct connection between Ripple the company and XRP.”

For some observers, though, the relationship between the company and the cryptocurrency is clear. Thursday’s complaint argues:

“The development of the XRP Ledger, and the profits that investors expected to derive therefrom, were, and are, based entirely on the technical, managerial, and entrepreneurial efforts of Defendants and other third parties employed by Defendants.”

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U.S. federal law requires companies selling securities to register with the Securities and Exchange Commission (SEC). Whether a financial instrument qualifies as a security depends on the Howey test, a standard derived from a 1946 Supreme Court case.

If an instrument involves an investment of money and carries a reasonable expectation of profits – an expectation that depends on the actions of a specifically identifiable group of people – then it is a security. Coffey’s complaint argues that XRP checks off all of those boxes.

Indeed, the lawsuit is one that could remain a case to watch given that the question of whether XRP is indeed a security is still hotly debated.

When reached for comment, Tom Channick, Ripple’s head of corporate communications, told CoinDesk via email:

“We’ve seen the lawyer’s tweet about a recently filed lawsuit but have not been served. Like any civil proceeding, we’ll assess the merit or lack of merit to the allegations at the appropriate time. Whether or not XRP is a security is for the SEC to decide. We continue to believe XRP should not be classified as a security.”

Taylor-Copeland was not available to comment on the complaint before press time.


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Author David Floyd

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