Story Highlights
- SEC considers XRP a commodity in Ripple settlement talks.
- ETH comparison plays a key role in SEC’s XRP evaluation.
- Ripple CTO argues XRP never had private sales like ETH.
The U.S. Securities and Exchange Commission (SEC) is considering classifying XRP as a commodity in its ongoing settlement talks with Ripple. A ruling by the SEC about cryptocurrency would create significant effects for the entire industry.
FOX correspondent Charles Gasparino reports that the SEC uses Ether (ETH) for comparison purposes. The SEC, along with the Federal Reserve Banks, is evaluating if XRP should be recognized as a commodity exchange instead of a security. The regulation status of XRP depends on whether the regulators decide it is a security or a commodity.
The major point of dispute in settlement talks concerns XRP’s commodity characteristics stemming from its utility, along with its trading behavior. According to the SEC, ETH started as an Initial Coin Offering before becoming a commodity through its time-based evolution. XRP, which funded platform development, led to Ripple being sued, but Ethereum had no such suit.
SEC Decision on XRP Could Impact Entire Crypto Industry
The SEC evaluates the conditions that could lead their legal team to classify XRP as a commodity similar to ETH. An XRP reclassification may trigger new regulatory measures for other cryptocurrencies across the board.
Chief Technology Officer David Schwartz from Ripple explained his perspectives through the social media platform X. Schwartz argued that ETH experienced private sales before its blockchain launched, whereas XRP had no such sales activity. The SEC might heavily consider the separation made between XRP and ETH when formulating its judgment.
Ripple has set the deadline of April 16, 2025, to file its appellant brief. The SEC faces an increasingly complex enforcement situation because Judge Analisa Torres recognized XRP as distinct from the other cryptocurrency types.
The decisions made in this case will establish important legal principles for the whole crypto industry. The classification of XRP as a commodity would possibly decrease regulatory limitations. Ripple could encounter additional legal battles because its classification remains as a security.
The crypto community maintains a close observation of the SEC’s forthcoming actions. The decision could impact not only Ripple but also the broader cryptocurrency market.
