In a recent interview with Bloomberg, when asked about the regulatory status of XRP, the US Securities and Exchange Commission’s Hester Peirce said that it doesn’t necessarily have to be a security,if the issuer of the cryptocurrency is sued by the agency.
SEC’s Hester Peirce has Strong Support for the Crypto Industry
Peirce – who earned the nickname “Crypto Mom” for her strong support for the crypto industry – claimed the enforcement action meant the asset was sold as an investment contract:
“When we think about a crypto asset as being a security, what we’re doing is we’re saying it’s being sold as part of an investment contract, which means that there are promises being made around the sale of this asset. It doesn’t mean that the asset itself necessarily has to be a security. It means that it was being sold as security.”
Peirce believes the SEC needs to get more regulatory clarity before the agency spends too much time dealing with non-fraudulent cases.
Ripple Insists that XRP is not an Investment Contract
Distributed ledger technology provider Ripple, along with its two noted executives, Brad Garlinghouse and Chris Larsen, were sued in court in May for allegedly violating federal securities laws for unregistered XRP sales.
However, the defendant argued that the sale and distribution of their cryptocurrency is not an investment contract as the XRP holders have no shares in the company.
As reported by Fxcryptonews, the court recently approved the U.S. Securities and Exchange Commission’s motion for a two-month extension of the Ripple case’s exposure, which means the case could be extended to 2022.