Chris Giancarlo, former director of the CFTC (Commodity Futures Trading Commission) also known as CryptoDad, wrote an article in which he clearly specifies that Ripple (XRP) is not a security token.
The article is very long and complex and starts from the early days of blockchain and crypto technology highlighting the incredible speed with which they are evolving.
For this reason, it’s really difficult to somehow regulate them or determine standard parameters that can fit everyone, especially with what is decided by the SEC (Securities and Exchange Commission), a true authority in this area.
It is in fact the SEC that most often decides the fate of many crypto projects, repeatedly claiming victims, as happened in the case of Gram, the Telegram token, which had to abandon the project despite a $1.7 billion ICO (Initial Coin Offering).
It is precisely on ICOs that the emphasis is placed, especially in relation to the fact that these have led to the birth of many scams that have seen investors lose millions of dollars.
The SEC, following a law dating back to the 30s, the Security Act and the Securities Exchange Act, intervenes because tokens are often like actions that would guarantee a return on the initial investment and therefore would have to comply with rules that are not respected.
The case of Ripple
This is the debate that sees Ripple as the protagonist: is XRP a security or not?
Giancarlo says no, believing that XRP is decentralized (even though Ripple owns more than half of XRP).
Since Ripple would not control the XRP, these would not follow the value of the company and therefore would not be security, according to Giancarlo.
This is why, according to the former CFTC director, Ripple would not be subject to security regulations.
In the document, Giancarlo also highlights the utility token function of XRP, serving several projects also as a real means of exchange.
According to the director, this utility is demonstrated by the various platforms that have started to accept it as payment, or even by the different projects that use their ecosystem.
In any case, although the document comes from an authoritative and expert source, the author is also Ripple’s lawyer and therefore has every interest in passing on a certain concept rather than another.Â
