- Crypto-platform reports Q2 sales decline amidst rumours that XRP will be reclassified as a security
- Ripple strongly rebuts speculation
- New customer signups continue to rise strongly
Cryptocurrency cross-border payments startup Ripple has vigorously rebutted speculation that its XRP token may be classified as a security in the USA after reporting a sharp drop in its sales during the second quarter of 2018 compared to Q1. In Q2, the firm sold USD $73.52m, while in Q1 sales were USD $167.7m – a fall of 56.15%.
Several media reports have surfaced recently suggesting the US Securities and Exchange Commission (SEC) may be about to reclassify XRP as a security – a move that could prompt a large decline in its market value.
A Ripple spokesman told the British newspaper Express.co.uk: “Everyone is free to say what they want or pursue their own agenda in the media, but ultimately the facts around XRP will win out over uninformed speculation.”
“XRP doesn’t give its owners shares in Ripple, the XRP Ledger is decentralised among 150 plus independent validators – Ripple operates only 14 of them – and XRP would continue to exist even if Ripple disappeared tomorrow.
“Based on these facts – and many more – we continue to believe XRP should not be classified as a security.”
The XRP token is currently the focus of intense debate in the USA over whether cryptocurrencies should become subject to securities legislation. Ethereum and Bitcoin, the biggest digital coins by market capitalisation, are not currently deemed to be securities. Yet the XRP token, which is referred to by Ripple as an “independent digital asset” has become subject to near-paranoid speculation primarily because Ripple, which is in fact a technology firm, owns 60 billion out of the entire 100 billion tokens currently in existence.
In law, securities are ownership shares that must be registered. In the USA, a continuing lawsuit maintains that Ripple created XRP “out of thin air” as a component in a ceaseless initial coin offering (ICO) that is being exploited to generate hundreds of millions of dollars.
For its part, Ripple has consistently rebutted these claims. In April, for example, Ripple Chief Market Strategist Cory Johnson insisted to CNBC that XRP was certainly not a security as it doesn’t meet the requirements for the definition of such an entity as exemplified in the history of court law.
However, claims to the contrary keep surfacing. The CEO and founder of Yield Coin, Samuel Leach, told Express.co.uk that Ripple was indeed undergoing “major issues” with the SEC and that the latter had already privately declared that XRP would become a security token. Should that prove true, the SEC would have ultimate authority over whether investors can put their money into it. Regulation, in effect, would become far more onerous and taxes on capital gains would become stricter.
On a brighter note for the international money transfers platform, though, XRP emerged from a Twitter poll by Weiss Crypto Rating as the best way to send and receive money to and from exchanges: 78% of the polls cast were in favour of XRP.
In terms of the numbers of new customers signing up, Ripple sees Q2 as its “best quarter ever” and, to put things in perspective, the sales drop aligns with the overall bear market in digital assets.
For an informative review of Ripple, please read this article on FXcompared.com.
