A renowned entrepreneur predicts XRP will be classified as a security. So is regulating crypto as a security the only way to ensure transparency?
The chaos in the crypto industry after the collapse of FTX has put the entire industry under tighter scrutiny by regulators. FTX was once the second-largest exchange globally, it has taken down many small and big companies along with it. Investors lost billions of dollars globally with direct or indirect exposure to FTX.
Jeff Sprecher, the CEO of Intercontinental Exchange (ICE), believes that regulators will deal with most cryptocurrencies like securities, according to a Reuters report. Whereas Gene Hoffman, the COO of Chia network, anticipates that a federal judge would rule XRP tokens as securities.
Is XRP a Security?
Gene Hoffman mentioned in a tweet that Bill Hinman, the former director at the Securities and Exchange Commission (SEC), warned Ripple that he viewed its unregistered XRP distribution as illegal.
Contrary to this, John Deaton shared his opinions through a Twitter thread, debunking Hoffman’s opinions. Deaton is a crypto enthusiast lawyer leading a class action lawsuit against the SEC. According to John Deaton, there is no meaning to Bill Hinman’s comments under proper context.
Gene Hoffman believes that there is no difference between XRP and LBC. LBRY Credits (LBC) is the token of the decentralized content distribution platform LBRY. Last month, the SEC won a legal battle against LBRY, and LBC tokens were classified as securities.
There are various narratives and opinions from industry experts about whether XRP is a security, perhaps only time will tell under what category XRP falls.
Cryptocurrencies are Unregistered Securities?
Jeff Sprecher firmly believes that most cryptocurrencies are going to be regulated as securities. According to him, there is no need for separate laws to govern cryptocurrency as they are no different from stocks or other securities.
“What does that mean? It means more transparency, it means segregated client funds, the role of the broker as a broker-dealer will be overseeing, and the exchanges will be separated from the brokers. The settlement and clearing will be separated from the exchanges,” he said.
Furthermore, Bitcoin bull Michael Saylor recently said that all altcoins are unregistered securities. He says the best thing will be for the SEC to shut down all unregistered securities as they are committing securities fraud, especially Ethereum.
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