Despite the United States’ Securities and Exchange Commission’s lawsuit against Ripple, classifying the digital currency as a security, the UK treasury maintains that XRP is merely an exchange token. The UK Treasury is in charge of developing and implementing the country’s financials and economic policies. Earlier, it categorized crypto assets according to its 2019 FCA law.
The United Kingdom treasury says XRP cannot be classed as securities
In a fresh report on UK’s stance on cruptocurrencies and stable coins published by the UK treasury, the government cited XRP as a token rather than a security. The report added that Bitcoin, Ether, and XRP are nothing but digital assets that are meant mainly for exchange. Consequently, all the above digital assets are not security nor money.
The UK government added that security tokens can be compared to certain investments such as debt or share instruments as stipulated in the country’s constitution. The treasury asserted that these are probably regarded as tokens or digitalized securities. Recently, Ripple has been enmeshed in a legal tussle with the U.S. SEC on the identification of the digital asset as a security.
However, the UK Treasury also expressed concern about the huge volatility being currently witnessed in the cryptocurrency market. The government noted that given such high volatility, the crypto assets can not be used as a reliable means of payment. Nevertheless, there has been a continuous rise in investors’ appetite for crypto assets.
Following the U.S. SEC’s allegation against Ripple, XRP’s price has been falling heavily and has been delisted by some exchanges such as Coinbase and Bitstamp. At the time of writing this report, XRP was trading at$0.2949.
Ripples’ legal battle against the SEC
Meanwhile, Ripple has countered the SEC’s classification of XRP as a security despite the U.S. SEC’s tag of the digital asset as one. In addition to the classification of XRP as a security, the SEC accused Ripple management of illegally raising funds to fund the company’s operations by selling unauthorised digital assets to both investors within and outside the Unites States. Two CEOs of the company, Christian Larsen and Bradley Garlinghouse were also indicted for illegally selling XRP to the tune of $600 million.
Meanwhile, recall that last year, Ripple hinted that it could relocate its headquarters to London if the UK government refuses to join the U.S SEC in tagging XRP as security. The CEO made this known to some newspapers that the UK’s FCA has been transparent about its stance towards XRP, hence, the company would find it expedient to relocate to the UK.
According to Ripple’s chief, other countries that are in the company could relocate to include Japan, UAE, or Singapore. Garlinghouse berated the US SEC for being “out of sync” with the reality and accuse the SEC of wrongly accusing the company.