Chris Giancarlo, former head of the Commodity Futures Trading Commission (CFTC) who declared that BTC and ETH should not be categorized under securities, has offered the same fate to XRP. Nevertheless, he now works for a legal firm that represents Ripple, casting doubt on the neutrality of such statements.
The Argument By Chris Giancarlo (Crypto Dad)
Chris Giancarlo, the former Chairman of the Commodity Futures Trading Commission (CFTC), submitted an opinion on the 17th of June last year saying that XRP does not meet the criteria to be designated as a security under the Howey Test. He has also reiterated the same statement yesterday on Twitter.
In evaluating XRP, Giancarlo’s study uses the Howey test which has statements. A coin must symbolize an investment “in (1) a public venture, with (2) a hope of profits, (3) primarily from the promoter’s effort or that of a third-party” to be classified under securities.
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He concludes that XRP fails to satisfy all of the three factors. Giancarlo then goes on to dispel the long-held suspicions regarding Ripple’s hoarding of XRP and network decentralization.
During a conversation with Charlie Gasparin, “crypto dad” said that Ripple has “repeatedly stressed the usefulness of XRP token as a liquidity instrument and a payment mechanism” rather than promoting it as an investment tool.
He suggested that XRP be treated as a cryptocurrency or a means of trade rather than a security. “In recent years, the widespread usage of XRP as a means of exchange and a method of payment, by users and also in the business-to-business sector, has further emphasized the value of XRP as a genuine alternative to fiat currency.”
Giancarlo resigned from the commission in 2019 and is no more tasked with such decisions. He is now financially related to Ripple, the largest holder of XRP coins, which raises even more questions as to whether his statements are not laced with partiality.
The Fate Of Ripple
The final verdict as to whether or not XRP is under securities will certainly have a huge effect on a wide range of investors in XRP, Ripple, and related technology. Heath Tarbert, the former head of the Commodity Futures Trading Commission, said in 2020 that the position of XRP as security is “uncertain” at the time. He also stated that the CFTC and the SEC had been cooperating closely “to decide what falls under securities.”
The legal battle involving Ripple and the Securities Exchange Commission is heating up, and the revelations from the lawsuit have kept things intriguing. Following the revelation of the mystery surrounding the matter, Giancarlo’s declaration that XRP is “not under securities” has helped to uplift the spirit of the cryptocurrency community.
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