UK FCA Hints At XRP Potentially Being An Exchange Utility Token Hybrid, Non Security

  • FCA Mentions XRP in July 2019 Report.
  • XRP Ongoing Debates - Security or No?
  • Non-Security Status Could Result in Rally.

As the cryptocurrency space continues to expand, regulators are also expanding their powers and beginning to crack down. Many regulators are starting to understand the widespread adoption that’s occurring in cryptocurrency and Blockchain. Along with companies such as Samsung expanding into the crypto space, we are also aware of Facebook’s plan to introduce cryptocurrency to 1+ billion users globally. When any sort of technology evolves to the masses, the regulatory industry will surely be involved.

Kik Messenger, commonly called Kik, is a freeware instant messaging mobile app from the Canadian company Kik Interactive, available free of charge on iOS and Android operating systems. It uses a smartphone’s data plan or Wi-Fi to transmit and receive messages, photos, videos, sketches, mobile webpages, and other content after users register a username. Kik is known for its features preserving users’ anonymity, such as allowing users to register without providing a telephone number. However, the Kik application logs user IP addresses, which the company can use to determine location. As of May 2016, Kik Messenger had approximately 300 million registered users, and was used by approximately 40% of United States teenagers.

The SEC began cracking down on projects who were offering “securities” to investors. Crypto projects can potentially be offering securities while they are not “registered” to do so. According to investopedia a security is “tradable financial assets, such as equities or fixed income instruments that are purchased in order to be held for investment.” This also tends to involve any asset that is purchased with the ultimate goal of a short term profit. The legal framework within the term “security” is very extensive and is the reason some assets can bypass the definition. Within the cryptocurrency space, the SEC has only announced that Bitcoin and Ethereum are “non-securities” based on their infrastructure. The SEC most recently sued messaging app company “Kik” for its $100 million dollar cryptocurrency offering. The SEC is stating their cryptocurrency fits the criteria of a “security” and was involved in illegal security offerings. Kik said in the article above that it was expecting the issue to arise and they believe its the right thing for the industry to experience in order to move forward. The term “security” is very confusing to many, and the crypto industry wants clarity in order to continue innovating.

United Kingdom FCA & XRP? 

Many argue the sell-off in XRP has been due to “security” talks. The community is very mixed in this fashion. Some say XRP fits the definition of a security due to its connection to the company Ripple. This differs from Bitcoin and Ethereum who are decentralized and have no “central party.” Ripples CEO ( Brad Garlinghouse ) has defended XRP multiple times arguing its framework doesn’t fit “security” standards. Brad has argued XRP is not “centralized” due to the fact XRP would still exist if Ripple shut its doors today. He also argues that standard securities have no utility. XRP has utility due to its efforts to help financial firms move money cross-borders. The SEC has not made any ultimate rulings on XRP which has caused uncertainties. Many believe the price will fall substantially if the SEC stated XRP to be a security. On the flip side, many argue XRP is just waiting for a “non-security” announcement to fuel all time highs and potentially more.

Despite the SEC not making an announcement yet, there were some interesting developments in the UK regarding XRP. In a July 2019 publication by the UK Financial Conduct Authority, the outlet mentioned in a quote “Tokens may have mixed features that may overlap with the above categories, or change over time. For example, Ether can be used as a means of ‘payment’ (exchange token) on the Ethereum platform, and can also be used to run applications (utility token). XRP has similar features.” This was a strong statement by the FCA as they stated that opposed to a security token, XRP might best be classified as a hybrid between an Exchange and Utility Token which could grand “non-security” status.

This statement followed Brad Garlinghouses belief in the Yahoo report above that XRP fits the criteria of a utility token opposed to a security token. There were rumors that Ripple could potentially be working with the Federal Reserve on their new “FedNow” system to enable real-time payments globally. We mentioned in a recent report that XRP being granted “non-security” status would be very bullish in our opinion.

Find Visionary Financial on Twitter

Notice: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. The information has been obtained from sources we believe to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the crypto currency they discuss. The information and content are subject to change without notice. Visionary Financial and its affiliates do not provide investment, tax, legal or accounting advice. This material has been prepared for informational purposes only and is the opinion of the author, and is not intended to provide, and should not be relied on for, investment, tax, legal, accounting advice. You should consult your own investment, tax, legal and accounting advisors before engaging in any transaction. All content published by Visionary Financial is not an endorsement whatsoever. Please also visit our Privacy policy; disclaimer; and terms and conditions page for further information.

Only $1/click

Submit Your Ad Here

Visionary Financial

VF - Crypto & Blockchain News, Research and Social 


https://www.visionary-finance.com/

Leave a Reply