Regulations have always been a big deal with cryptocurrencies. The U.S. government wants to clamp down digital assets for several reasons. While major cryptocurrency projects have been affected, others have barely been noticed. Recent events such as the downtrend in the cryptocurrency market and the recent seizure of mining rigs by Chinese regulators from Bitcoin Miners in China, keeps reminding us that the world of crypto will never be the same.
Early in the year the U.S. regulators reined in on Ripple Labs for raising more than $13 billion through a private sale of untraceable digital assets to users. This issue had created a bitter court tussle between the team at Ripple and the SEC, stretching over eight years.
Secondly, Ripple issued massive XRP tokens to users in a bid to reward users for services rendered. The team rewarded promotional activities carried out throughout the time period. However, the value of tokens created and how they were disbursed were not documented.
Lastly, the founders of the company organized a private sale where they sold tokens worth $600 million.
The New Information
A senior correspondent with the Fox Business Network opines that the Security Exchange Commission is taking a hard look at crypto and it is coming up with a robust plan. While Jay Clayton, the former SEC boss, had been lenient with the crypto industry, the new leadership will attempt to put digital assets in its place with regulations. This is the exact thing that happened when Ripple was examined by the SEC. It was a bold move from the regulators who are looking at labeling good or bad projects with their approach.
Earlier the regulatory approach had given Bitcoin and Ethereum a positive image. This is because they were implied to be compliant. Recently, the SEC refuted the claim, saying that both digital assets had never been categorically described as compliant. Gasparino added the agency declined further opportunity to clear the air on the nature of compliance.
The recent comment from the correspondent is sparking debate on the compliant nature of Bitcoin, Ethereum, and XRP. People think that his claims are baseless and therefore do not agree with the correspondent. Others have argued that cryptos, especially Bitcoin are not securities in the traditional sense of the word. If a digital asset is not a traditional security, rules that govern traditional investments do not apply. Several people have contributed to the argument with examples as to why Bitcoin is not a security.
When Ethereum was put under the same scrutinizing lens, opinions were far and in-between. People believe the SEC is not coming to terms with defining Ethereum as an asset or security. The regulator itself has not fully grasped the idea of digital assets and its classification, especially with Ethereum.
While the regulators have not categorized Ethereum as a security, their indecision ends there. but, the reality for Ripple is different, an event which has turned the leadership of the digital asset against the regulators. This bitter tussle resulted in a legal issue, which does not speak well for the bullish sentiment of the coin.