Ripple’s cryptocurrency, XRP, seems to be attracting quite a gathering after what was rumored as its listing on Coinbase sent investors on a trading spree. In just a few months since the alleged rumors, XRP’s value has jumped from just 50 cents to about $4. As at this moment, XRP is the 3rd most sought-after cryptocurency in the world.
Interestingly, months down the line, Coinbase is yet to add XRP to its list of tradable digital assets on its platform. Based in San Francisco, Coinbase is the largest Bitcoin exchange in the US, and offers trading services for Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. It’s also planning to add Ethereum Classic soon.
XRP Is Not A Security
Speaking publicly about the issue on Thursday, Ripple’s CEO Brad Garlinhouse argued that Coinbase should add XRP on its trading platform, refuting claims that the token might fall under SEC’s authority that regulates securities.
Brad faulted the idea that XRP is a security, saying that despite Ripple’s ownership of XRP, the company has no control over the token since its ledger system exists independently and would still continue propagating even if the company (Ripple) ceased its operations, suggesting that the cryptocurrency is decentralized just as Bitcoin and others.
Going further, he said that since XRP’s objective was to facilitate easier transaction for institutions, it would be in Coinbase’s interest to contribute towards that objective. He likened the situation with countries like Saudi Arabia that have oil but are not in a position to control it. Brad was speaking in an interview with Jeff John Roberts of Fortune at the Future of Fintech conference hosted by CB Insight in New York.
However, Coinbase has turned down attempts to have XRP listed on its platform. So far, Coinbase has turned down a $1 million offer to list the crypto, standing its ground in its policy of not listing cryptos that have been classified as securities by the SEC. Listing such securities would require exchanges to acquire extra certifications and approvals.
Just last week, SEC announced its stand on Ethereum, saying that the cryptocurrency does not classify as a security. While this is good news for Ethereum traders, it raises fears about the possibility of SEC classifying XRP as a security, owing to the fact that Ripple is the majority shareholder.
Commenting on the issue, William Hinman, a SEC official, said that systems that depend on close relations to particular actors for their success are prone to fall under SEC laws. He did not mention Ripple or XRP.
It remains to be seen what happens next as exchanges hold back waiting for the final verdict on where XRP stands before listing it. At the moment, Kraken is the only US-based exchange that offers dollar-to-XRP exchanges, albeit in select states.