Members of the XRP community are rubbing their hands in glee following a recent development that could have an impact on the future of the Ripple-promoted token.
A recent research paper penned by the European Corporate Governance Institute (ECGI) affirms XRP’s status as a utility token — not a security — in line with the U.S. federal court ruling in July 2023.
Clarifying XRP’s Legal Status
The European Corporate Governance Institute’s paper, entitled: “Corporate Governance Meets Data and Technology,” explores the evolving fundraising techniques in the blockchain space. Authored by Wei Jiang of Emory University and Tao Li of the University of Florida, the paper delves into different fundraising mechanisms, including Initial Coin Offerings (ICOs) and Security Token Offerings (STOs).
The central focus of the study is the murky regulatory landscape surrounding cryptocurrencies, particularly concerns raised by regulatory watchdogs such as the U.S. Securities and Exchange Commission (SEC) regarding the classification of tokens issued via these fundraising methods.
Notably, SEC chairman Gary Gensler has taken the view that almost all cryptocurrencies, including XRP, are securities and therefore fall under the agency’s purview. However, a federal judge determined last July that XRP sales on public crypto exchanges are not securities.
ECGI’s endorsement of XRP’s utility token status gives legitimacy to assertions that XRP is a global bridge currency within Ripple Payments (formerly known as RippleNet) that enables real-time and cheap cross-border transactions. This could usher in mass XRP adoption by banks and other financial institutions looking for seamless payment solutions.
A Key Date In SEC vs. Ripple Case Edges Closer
Meanwhile, all attention on the SEC vs Ripple lawsuit has turned to March 22. On this day, the securities regulator will give key opening briefs on the proposed Ripple remedies.
Prominent defense attorney James K. Filan noted that Ripple’s opposition brief is due on April 22, 2024, and the SEC’s reply brief is due two weeks later, on May 6, 2024.
XRP trades for $0.6251 at publication time, shedding 5.6% in the last 24 hours, in line with a wider crypto market drawdown — Bitcoin (BTC) fell 3.5%, Ethereum (ETH) 5.2%, and Dogecoin (DOGE) 8.47%.
