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Ripple and regulations: The survival of the fittest, results expected shortly

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Ripple XRP
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As you probably know governments regulate (sometimes very heavily) all institutions and companies doing business in the financial sector. Seeing how those very companies have sunk the planet in three world economic recessions over the last few decades, there are those who argue that such regulations are not substantial enough (or enforced enough).

Cryptocurrencies, on the other hand, are not regulated at all for the most part. Some national governments, mainly in Asia, are starting to see the writing on the wall and acting accordingly but in Europe and the Americas, the cryptosphere remains utterly anarchic. But as accusations of being a security fall on some cryptocurrencies, mainly Ripple (XRP), the proper authorities everywhere (at least in the United States) will have to take a stand.

That could or could not prompt, at last, some regulations but it could also be that the competent authority (the SEC in this case) will limit itself to determine if any given digital asset must be considered to be a security or not. The cryptosphere is, thus, at a crossroads.

The SEC authorities have already declared both Bitcoin and Ethereum not to be securities and they also have given guidelines (not to be confused with actual decisions) about how they think they will assess the financial nature of each crypto coin.

In the end, it boils down to this: every cryptocurrency that starts life through an ICO could be considered to be a security as ICOs promise, at least implicitly, a profit for the participants. Every other coin will not be considered an asset but as something more or less alike to a fiat currency.

The good news is that SEC is not very eager to interfere in the crypto world; they are somewhat willing to laissez-faire, at least as long as things don’t go out of control, one should assume.

The bad news is that Ripple’s XRP is still under a lawsuit for allegedly being a security and it is probably casting a shadow over the whole project and, by extension, over the cryptocurrency markets. Because of the significant momentum Ripple and XRP have been gathering lately, this is a particularly important case so it behooves us to have a closer look to this situation and try and figure out what we should expect as an outcome.

SEC cannot name Ripple’s XRP a security

This dish has two main ingredients: what the government can or will do and what Ripple can or will do. Let’s start with the government. The first thing we need to be entirely clear about is that no lawsuit can determine the nature of any financial instrument or asset. Or in plain English, only the SEC can decide if something is a security, no judge or court of law has the legal power to make that decision. So our first ingredient is, in fact, quite simple.

It all comes down to a choice made by the SEC. The question is how likely is it to declare Ripple’s XRP a security? Not much, probably not at all.

The main reason for this is that XRP has never had an ICO. Every single XRP token already exists because it was pre-mined by Ripple Labs before it went live, so it doesn’t even require miners the way Bitcoin and others do. Since SEC has already stated that its main standard will be the precedent of an ICO, XRP should be pretty safe.

Now for our second ingredient. Ripple can’t directly affect SEC’s decision, of course. The financial nature of both Ripple Labs and the XRP currency was determined years ago, and it can’t change overnight.

It doesn’t need to change, anyway. But Ripple is scrambling and tweaking a few things to ensure that the difference between the company and the coin becomes apparent both for the authorities and the public so that any possible doubt is clarified easily.

Let’s review a few of the measures Ripple Labs is taking to achieve that goal

Mr. Brad Garlinghouse (Ripple Labs CEO and former Uber driver) has been explaining extensively at every possible opportunity (interviews, conferences, lectures, etc.) that the company and the coin are not identical.

In a dramatic statement that he repeats frequently, he explains that if Ripple labs went away, XRP would still stay around as a viable cryptocurrency because all the infrastructure needed for that is already in place, it’s decentralized and is not owned by Ripple Labs in any way.

Ripple Lab’s chief cryptologist, David Schwarz is not the chief cryptologist anymore. He’s now the company’s CTO, but we all suspect the actual job he’ll keep doing is precisely the same. So why to rename the same position? Well, there’s an excellent reason, and it has to do with distancing the company from the token. Almost every big company has a CTO. For instance, even Walmart has a CTO, believe it or not.

So this is a standard executive position in the corporate world. Chief cryptologist, on the other hand, is a position that almost no other company in the world has.

Even within the software technology industry, have you ever heard about Microsoft’s Chief Cryptologist? Or Google’s, Oracle’s or Amazon’s? The very job title “chief cryptologist” suggests too close a relationship with XRP. That’s why Mr. Schwarz now has a “new” job.

Less than a month ago, Kahina van Dyke was snatched from Facebook to become Ripple’s vice president of business and corporate development. She is a woman who spent decades in Wall Street before becoming Facebook’s global financial services team leader.

The standard interpretation for this move is that this is a skilled person who already has all the contacts Ripple needs so that more banks and financial institutions adopt the Ripple ledger quickly.

And that could very well be the case. But almost nobody has noticed another critical fact. Mrs. van Dycke, with her extensive experience leading financial development teams and dealing with regulators, could also be the ideal person to advise the company on how to get rid of the “security” problem once and for all.

Maybe the most significant problem Ripple faces will be to prove that XRP is as decentralized as, say, Bitcoin and that the immense amounts of XRP tokens that Ripple still holds will not give it undue power over the coin’s performance.

But then again, we go back to the main thing: Ripple has never promised anybody they would make a profit by buying or holding XRP coins, and it never held an ICO.

“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.” This quotation is (falsely) attributed to Charles Darwin who never once wrote it or said it. Still, it does capture the essence of evolutionary theory and presents a valid idea in a pithy way. It’s the survival of the fittest, with fitness understood as adaptability.

Make no mistake. Ripple Labs has the Bitcoin and Ethereum precedent on its side, and it fits SEC stated criteria not to be a security. But if that wasn’t enough, you have to see that Ripple is, indeed, adapting to survive and that, alone, will make it prevail. And as things are more evident to every now (including SEC I believe), the results of the exhausting Ripple SEC battle are just around the corner of finding a seat.

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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.

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Altcoins

HODLing Stellar Is A Good Plan For 2019

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HODLing, or holding on to a certain asset or assets has always been an extremely useful investment strategy, even before cryptocurrencies were even imagined. Now, with the market being more uncertain than ever, many are wondering what is the right thing to do with the coins in their possession.

Of course, things change depending on the coin in question, but today, we are going to talk about why it is a good idea to hold on to your Stellar (XLM) in 2019.

Why You Should Hodl Stellar (XLM)

The crypto market is rich with hundreds, and even thousands of different projects at this point, and separating valuable ones from those that are destined to slowly fade away can be tricky. However, even the biggest skeptics believe that Stellar is a coin that is here to stay.

XLM was first launched in 2014, and for a long time now, it has been among the top 10 cryptos by market cap. It is an open-source, decentralized protocol that allows users to send fiat currencies by using cryptocurrency as a method of transport. In a lot of ways, it is very similar to XRP. However, the biggest difference is that Stellar aims to offer its services to regular people, while XRP is more interested in working with banks and financial institutions.

Nevertheless, sending money, especially when it comes to cross-border…

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Altcoins

Reasons To Invest In Electroneum In 2019

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2018 has been quite a rollercoaster for the crypto space. Coins went up and down more times than anyone could have guessed, not to mention two massive market crashes. However, in a few short weeks, the year will be over, and a new, positive period for the crypto world is expected to arrive.

While there are many predictions for 2019, today we are only interested in one thing — Electroneum (ETN). A lot of people quickly took notice of this coin, and many believe that it is among the coins of the future. Indeed, it has received a lot of attention, and many are interested in why that is, and why investing in it is a good idea. So, let’s take a look at a few reasons why you should invest in ETN in 2019.

1) It is fast

Speed and precision of any service have always been very important to people. This importance is even greater when making a profit depends on it. Electroneum developers were aware of this when they created it, and the coin is up to 5 times faster than Bitcoin. This means that ETN transactions can be confirmed much faster, which in turn reduces fees and waiting time.

Furthermore, there are also plans to create Electroneum Virtual Currency Exchange, which will allow the project to act as an exchange. However, the even…

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Bitcoin

SEC Postpones Bitcoin ETF Decision Once Again

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The new announcement by the US SEC (Securities and Exchange Commission) states that the decision regarding the potential approval of several applications for a Bitcoin ETF (exchange-traded funds) is once again postponed. This time, the SEC declared that the decision will be made by February 27th, 2019.

The application requesting that VanExk SolidX BTC fund get s listed on Cboe BZx Exchange that was published on July 2nd needs to be given order by the commission within 180 days. Originally, the deadline for doing so was December 29th. However, the SEC decided to extend the period for another 60 days, effectively moving it to February 27th.

The SEC stated that designating a longer period for making a decision was found appropriate, as more time is needed in order to properly consider the rule change.

Cryptocurrencies need a sufficient monitoring mechanism, claims SEC chairman

Recent reports claim that the SEC received over 1,600 comments after requesting the public opinion regarding the ETF applications issue. In the past, the SEC rejected many such applications, some of which were even submitted by SolidX itself. In addition, they also rejected the applications submitted by Gemini, the exchange owned by Winklevoss twins. Brothers were attempting to gain ETF approval ever since 2013, although to no avail.

Other applications were also submitted by Direxion, ProShares, as well as GraniteShares. The SEC rejected them…

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