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SEC Contemplates Classifying XRP as Commodity Amid Settlement Talks with Ripple
In a recent update, it has been reported that the Securities and Exchange Commission (SEC) is considering reclassifying XRP as a commodity during ongoing settlement negotiations with Ripple Labs. This move could have significant implications for the cryptocurrency market and Ripple’s legal battle with the regulatory body.
According to sources, the SEC is weighing whether XRP exhibits characteristics similar to commodities like Ethereum, which has been deemed a “pure commodity” by the agency despite its initial fundraising through an Initial Coin Offering (ICO). This potential reclassification could have far-reaching consequences for Ripple’s ongoing legal dispute over alleged unregistered securities offerings.
Ripple did not conduct an ICO for XRP. Instead, the digital asset was pre-mined when the XRP Ledger launched in 2012, resulting in the creation of 100 billion tokens. The company then distributed XRP through a controlled release system using escrow accounts and periodic sales to fund operations and increase market liquidity.
The SEC’s consideration of reclassifying XRP as a commodity highlights the ongoing efforts to clarify the regulatory landscape surrounding cryptocurrency markets. As negotiations continue, it remains unclear whether Ripple will ultimately succeed in its efforts to redefine the nature of their digital asset.
It is worth noting that neither Ripple nor the SEC has publicly commented on these developments.
Source: https://cryptobriefing.com/xrp-commodity-classification-sec/
