News » SEC’s Rationale For Action Against XRP Cryptocurrency

SEC’s Rationale For Action Against XRP Cryptocurrency

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March 19, 2021

Investors who have been adding crypto CFDs to their portfolios have been spooked by SEC v. Ripple. Nikhil Mehta, an attorney at SmithAmundsen LLC, opines on the case against Ripple and its XRP cryptocurrency in FinanceFeeds. Mehta says the suit may have a big impact on regulation of blockchain and financial technology, as well as digital currency. The SEC alleges that XRP is an unregistered security, not a commodity or other type of asset because it was developed by Ripple in a centralized way. The agency has stated that bitcoin and Ethereum are not securities due to their decentralized nature. Mehta notes that the case rests partially on the fact that Ripple, by itself, minted the entire supply of XRP when it was launched. Ripple wants to review the SEC’s internal discussions. According to Mehta, some observers believe that if permitted, that could hurt the SEC’s case.

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