Key Takeaways
- The SEC is considering classifying XRP as a commodity during settlement talks with Ripple.
- Ethereum’s regulatory treatment is a key comparison point in the legal battle concerning XRP.
The SEC is considering classifying XRP as a commodity in its ongoing settlement talks with Ripple Labs, FOX Business senior correspondent Charles Gasparino reported today.
SCOOP: Off of @EleanorTerrett’s scoop from yesterday on the @Ripple–@SECGov settlement negotiations, one issue that is being weighed by the commission is whether $XRP continues to trade and have a utility that makes it more a commodity and not a security. I am told the…
Gasparino said that securities regulators are evaluating whether XRP shares characteristics with commodities like Ethereum, which the SEC currently views as a “pure commodity” despite its initial fundraising through an Initial Coin Offering (ICO).
The potential reclassification could affect Ripple’s ongoing legal battle with the SEC over alleged unregistered securities offerings. Ethereum’s regulatory treatment has emerged as a key comparison point, as both XRP and ETH were initially used to fund blockchain network development.
Ripple did not conduct an ICO for XRP. The digital asset was pre-mined when the XRP Ledger launched in 2012, creating 100 billion tokens. The company, then called OpenCoin, received 80 billion XRP, while its founders and core team members got the remaining 20 billion.
Ripple distributed XRP through a controlled release system using escrow accounts and periodic sales to fund operations and increase market liquidity.
This distribution model has been a point of contention, as it differs from decentralized cryptocurrency launches and has drawn scrutiny from regulators like the SEC, which accused Ripple of selling unregistered securities.
However, Ripple’s legal victory in 2023 clarified that XRP sales on public exchanges did not violate securities laws.
Neither Ripple nor the SEC has provided public comments on the latest developments in the settlement discussions.
FOX Business journalist Eleanor Terrett reported Wednesday that the legal battle between the SEC and Ripple is nearing a conclusion, as the two parties are working toward a resolution.
Ripple’s legal team is reportedly negotiating adjustments to the ruling, which imposed a $125 million fine and restrictions on selling XRP to institutional investors.
Terrett said that ongoing discussions focus on adapting the terms to reflect recent shifts in SEC policies under its new leadership.
