Former SEC member reveals why XRP is a currency, not a security

06 Oct, 2018
by Will Heasman
News
Former SEC member reveals why XRP is a currency, not a security

Micheal Didiuk, a former member of the SEC has weighed in on the argument over XRP’s asset status, stating that it is a currency rather than a security.

Didiuk qualified his argument by evaluating the criteria behind which the SEC assess cryptocurrency.

The SEC currently use the Howey test to decide whether or not a digital asset should be classed as a security. Designed by the Supreme Court in 1946 the test filters out four deciding factors including; an investment of money in a common enterprise, an expectation of profits from said investment and if any profits come from the efforts of a promoter.

During the Swell conference, Didiuk debunked the theory that XRP fits into this category simple because in his view the asset doesn’t fulfil the all four factors… and he may be technically right:

“you have to satisfy all four prongs so if one of those prongs is not there, you’re not a security, with XRP, Ripple could go away and XRP would still exist”

Since XRP is allegedly not under any formal affiliation with, or in control of, Ripple, meaning that it technically isn’t being promoted by a third party and therefore doesn’t fulfill the criteria.

Read more: Former US President Bill Clinton is keynote speaker at Swell Event by Ripple; Ripple: "We are right on the cusp of massive adoption"; Will Ripple be "the Microsoft of crypto"?

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Read more about: Ripple (XRP)

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