With XRP dealing with the SEC’s onslaught after charges were served on the Ripple Labs and two of its top executives, Cardano founder Charles Hoskinson is now weighing in. According to the Cardano founder, XRP is a security.
The Cardano founder made the remark during a series of (Ask Me Anything) AMA videos. He implied that the XRP case was a bit complex because according to him, crypto assets are dynamic and hard to categorize.
“The problem with cryptocurrencies is they do everything and nothing. And some days, they look like securities, some days they look like commodities, some days they look like currencies and some days they look like something else entirely. In many ways, cryptocurrencies are the stem cells of finance. A stem cell is like a super cell and basically, it can become a heart cell or a brain cell or so forth. And regulation is a little difficult because more often than not regulators like buckets. So they don’t see stem cells, they see the heart cells and the brain cells and then there’s regulatory agencies connected to that system.”
Hoskinson went on to say that he did not believe XRP was a security although its status may have been different in the token’s early days. He also added that he questions whether there is any issue with the way the token has been distributed.
“I believe that XRP is not a security at least in the general sense, and I go back to that stem cell argument. There is certainly security-like behavior and it’s deeply puzzling to me, for example, in the age of smart contracts why an actual real company would be responsible for distribution of a token. Now that makes no sense. You don’t have to do that when you have an already existing, functioning network. So that alone is problematic, especially when there’s discretion amongst the custodial company to spend that.”
With the hammer seemingly coming down on XRP, the Cardano founder does not expect any ripple effect on the crypto industry at large.
“I don’t believe for a moment that for example if Ripple goes down and XRP burns down in fire, that somehow the whole industry is going to fall apart and everything is going to be a security, Ethereum and on down. It’s just not going to happen. I don’t believe that at all.”
The XRP debacle has set a lot of tongues wagging. Major exchanges like Coinbase and Bitstamp have already pulled the plug on the token for the time being and it remains to be seen how that will end.
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