Commodities trader and analyst Peter Brandt said on Twitter that XRP would have been deemed a security if the US Securities and Exchange Commission (SEC) regulators completely understood the workings of cryptocurrencies. Brandt published his XRP stance in response to a comment by one Twitter user going by the name of Rexiby crypto, who claimed that Ripple owned “almost half of the total circulating coins.”
XRP company owns almost half of the total circulating coins….hard to trust such a scheme
— Rexiby crypto (@rexiby) November 10, 2020
According to Brandt, XRP was a “classic case of a market being manipulated by a bag-holder.”
XRP would have been declared as a security if the SEC understood cryptos. This is a classic case of a market being manipulated by a bag-holder.
Recently, on 5 November, Ripple published its quarterly XRP Markets Report to “voluntarily provide transparency” on the company’s views on the state of the XRP market. In it, and as indicated in the Q2 2020 XRP Markets Report as well, Ripple said it was actively buying – “and may continue to purchase” – XRP “to support healthy markets.”
According to the report, in Q3 2020, Ripple bought close to $46 million worth of XRP. Moreover, back in 2018, it had revealed that Ripple owned 60 billion XRP, of which 55 billion was locked up in escrow accounts.
But with regard to regulators, to date, the SEC has shut down several cryptocurrency projects for selling unregistered securities however the financial regulator remains undecided in the case of Ripple and XRP. In fact, US Department of Justice published a cryptocurrency “enforcement framework” after which the CEO of Ripple, Brad Garlinghouse stated that the 70-page report was “contradictory” and did not offer regulatory clarity. Garlinghouse had even argued that US lawmakers were making the crypto economy a “guessing game:”
On the other hand, former CFTC chairman Chris Giancarlo had once remarked that XRP was not a security at all. However, attorneys for a company called Bitcoin Manipulation Abatement LLC once filed a lawsuit accusing Ripple and Garlinghouse of misleading investors and selling XRP as unregistered security in violation of federal law in the US. Meanwhile, a federal district court in the US had even decided to allow a lawsuit accusing XRP for being an unregistered security. At that time, Ripple’s motion to dismiss the lawsuit against it was only partially granted.