Cardano Founder Says XRP Should Be Regulated As A Commodity• October 9, 2022 4:01 pm • Comments
The founder of Cardano Charles Hoskinson made his stance very clear when he said that XRP should not be considered a security and should instead be regulated as a commodity.
To specify, the founder stated that the majority of layer 1 protocols are not securities because they actually offer utility and run on a decentralized network.
XRP would qualify as a commodity under this definition as XRP is a layer 1 protocol and would also pass the Howie test.
If it passes the Howie test, then it would ultimately determine once and for all whether or not an asset is considered a security or not as this has been how the SEC has traditionally defined an asset in the past.
Over the weekend, Cardano co-founder Charles Hoskinson joined the list of influential people who are in support of Ripple.Cardano founder clear on Ripple case: XRP is a commodity like Ethereum, ADA and Bitcoin https://t.co/vq7OkzrwTr https://t.co/C0wTGhGyFR
— Christian (@FactorChengo) October 9, 2022
Basically, Hoskinson believes XRP to be a commodity, likening it to oil and even baseball cards.
However, he warns, if you try to securitize oil or cards, you have “obvious issues and information asymmetries”.
Hoskinson admits that cryptocurrencies do need regulation to keep markets stable and well-functioning, actors must be kept an eye on and cartels need to be examined. It is regulation for commodities that suits here best, he stated.
Another argument given by Hoskinson towards XRP being a commodity is that “commodities survive those who aggregate them”. In the case of Ripple, he wrote that the company has created “something that has an ecosystem that will survive Brad [Garlinghouse, CEO], Chris [Larsen, former CEO, co-founder], David Schwartz (CTO) or anyone else”.
So far, the use case and widespread adoption of the XRP ledger for multiple solutions like Ripple’s On-Demand Liquidity service has continued to increase.
Through all the existing partnerships with entities outside of the US, it is clear that XRP is decentralized and not under the control of Ripple.
After all, it would be impossible for Ripple to control that many independent participants in over 100 countries which further strengthens the case that XRP cannot fall under regular securities regulation.
In fact, the use of XRP and its ledger may likely even last longer than the lifetime of the company Ripple itself.
ICYMI: #Cardano's Charles Hoskinson believes $XRP to be a commodity, likening it to oil and even baseball cards https://t.co/5JmIai9lc6…
— Ryan (@Camille98141998) October 9, 2022
Cardano co-founder Charles Hoskinson has been discussing events around the two-year-long legal battle between the SEC and Ripple. The SEC sued Ripple Labs and its executives in 2020 for issuing unregistered securities in the form of XRP tokens.
The lawsuit led to the termination of multiple partnership deals for Ripple as well as the delistings of XRP tokens on multiple crypto exchanges mainly in the U.S. Analysts further blame the poor performance of XRP on the ongoing case with most investors shying away from the asset.
With the case headed for a conclusion and Ripple looking more likely to get a win, there has been increased interest in XRP. In the last 7 days, the token has gained more than 8 percent climbing above $0.51 according to our data.
Cardano’s Charles Hoskinson, says: “I’ve always taken a position that most layer 1 protocols aren’t securities,” #XRP is a Commodity and not a Security #bullish https://t.co/5Zmbjj59mZ
— Camille Kenton (@CamilleKenton) October 9, 2022
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