- Tom Emmer has cleared the air by declaring that Ripple is not a security in a virtual town hall meeting
- SEC declared that both BTC and ETH were not securities.
With a market capitalization of $12.8 billion, Ripple (XRP) is the third-largest cryptocurrency. The question of Ripple being security or not has prevailed in the crypto community for a very long time now. On this the US representative for Minnesota, Tom Emmer has cleared the air by declaring that Ripple is not a security in a virtual town hall meeting. Emmer is also the chairman of the National Republican Congressional Committee (NRCC).
Investors Had Filed a Class Action Lawsuit Against the Company in 2019
Previously, the blockchain company has been involved in many class-action lawsuits where investors had accused Ripple’s XRP of being unregistered as a security under the US Securities and Exchange Commission and demanded refunds. However, Brag Garlinghouse the CEO of Ripple made it very clear that XRP isn’t security because XRP is independent of Ripple. Emmer’s declaration has somehow provided relief for the Ripple community.
SEC’s Decision on Regulation of XRP as a Security Can Impact its Price
However, the SEC’s decision on the regulation of XRP as security could definitely affect the market value of the cryptocurrency. In fact, it could also impact the trust between the company and its investors. This may be a significant reason as to why XRP hasn’t received the same recognition as Bitcoin (BTC) and Ethereum (ETH), the top two cryptocurrencies. Two years ago, SEC declared that both BTC and ETH were not securities. Garlinghouse said that the absence of a regulatory framework in Ripple to some extent has hindered innovations. He also added that receiving clarity from the regulatory authority can definitely accelerate the internal process of the company.
US May Lose its Power by Imposing Stricter Regulations
According to Emmer, he loves XRP because it doesn’t require any intermediary. And the fact that despite 2 long years, the SEC has still not acted upon Ripple’s regulation as a cryptocurrency is definitely not acceptable. Consequently, Ripple and other similar companies may be compelled to shift their business to different countries whose crypto regulation is friendly and less stricter. Emmer further added that companies will definitely shift to places where it is easier to control. If the US government continues to impose stricter regulations on firms then it is possible that the US may lose its power as the leading crypto superpower. Hence, XRP’s regulatory clarification is something that needs to be worked on immediately.