TL;DR Breakdown
- UK classifies XRP, BTC and ETH as exchange tokens
- Ripple believes this classification helps in its defence against the SEC
Financial authorities in the UK have clarified their position on what they believe the native token of Ripple is. According to a new document published by the Treasury, XRP, alongside crypto assets like Ethereum and Bitcoin are classified as “exchange tokens.”
The report went on to state that these tokens fall under the “unregulated” category which means they are not e-money or even security tokens.
The new report also referenced a guide that the Financial Conduct Authority (FCA) had published in 2019. According to this document, XRP, BTC and ETH fall outside of digital assets that the financial watchdog can regulate.
FCA had also recently warned consumers about investing in crypto coins. The authority advised people to only invest in these digital assets if they were prepared to lose all of their money.
The new clarification by the UK Authorities recognises security tokens as specified investments, like a share or a debt instrument, as set out by the UK legislation.
UK’s clarification supports XRP claims
The clarification by the UK authorities backs the claim of the San Francisco-based payments company that its token is not a security.
The United States’ Securities and Exchange Commission (SEC) had filed a lawsuit against Ripple alleging that the firm’s native token, XRP, was an unregistered security. However, the crypto firm has vehemently denied this and elected to refute the Commission’s suit.
Ripple had severally requested that the authorities in the United States offer some form of clarification for the crypto industry in the country. The crypto firm had even threatened to move its headquarters out of the country due to this lack of clarity.
XRP price had suffered greatly upon news of the lawsuit, only regaining some momentum recently.
