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The SEC may never have a comment on the XRP, says Ripple’s CMO

15 october 2018, 19:56 by Jesús S. Affigne

The SEC may never have a comment on the XRP, says Ripple’s CMO

The Chief Marketing Officer at Ripple, Cory Johnson, believes that the U.S. Securities and Exchange Commission (SEC) could never decide over the classification of the XRP, arguing that there is not enough incentive to do so.

In an interview with BreakerMag, Johnson – a former journalist that worked for CNBC and Bloomberg, and founding editor in chief of Slam Magazine – commented that one of the most recurrent questions since he joined the San Francisco-based company is whether or not the SEC is going to come out and classify the XRP as a security or not, and when this could happen, to which he answers that such thing may never happen.

“I don’t know that the SEC wants to be in a position to have to comment on every single cryptocurrency or digital asset created and issue a ruling about it. I don’t know if they like what they did with bitcoin and Ether,” he said, adding that in his opinion, a governmental body could not find motivation enough to regulate “an entirely new part of the world” when nobody has asked them for, much less if there is no budget to start with.

Could it be deemed as security?

In order for the SEC to consider any financial asset to be a security, they apply a set of rules known as the Howey Test. Briefly, any asset is considered as a security is people invest money on a common enterprise, expecting to profit from the work done by a third party.

Ripple’s CEO Brad Garlinghouse has expressed in several opportunities that the XRP is not a security, since it doesn’t grant any stake on Ripple. Hence, anyone investing in XRP cannot expect to receive any dividends from the earnings of this company. Furthermore, if the company was to shut down at any moment, the XRP will be usable as if nothing happened.

This was echoed by Johnson in the interview, who said that people tend to think of Ripple and XRP as the same thing, when in fact they are not. “It’s the same as oil and Chevron. Chevron has a vested interest in oil. They have a lot of oil […] You can buy shares in Chevron like crazy, and it doesn’t give you any right to the world’s oil. You can buy every barrel of oil you can find, but that doesn’t give you any rights to Chevron. All that applies to Ripple and XRP,” he stated.

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