Craig Wright Pulls the ‘Security’ Trigger at XRP
There are people in the world who love drama, and one of them in the Cryptocurrency space is none other than Craig Wright who portrays himself to be real ‘Satoshi Nakamoto.’ A few days ago his mission on ensuring Bitcoin Cash SV gained prominence was destroyed when Roger Ver and team succeeded in Bitcoin Cash ABC gaining more Blocks and being the overall winner.
While the hard fork of Bitcoin went through a bad phase in the Cryptocurrency markets, one Cryptocurrency has battled it out and taken over second position – XRP. XRP has since beaten Ethereum to claim the second-ranked Cryptocurrency in terms of market capitalization.
Craig Wright has thus found another target, and that’s the same Cryptocurrency which has been showing it’s superiority – XRP. His latest tweet points fingers towards XRP being a ‘security’ and that it has violated Section 5 of the Securities Act of 1933.
XRP is going to be "found" to be both a security and in violation of Section 5 of the Securities Act of 1933. The Act mandates the registration of securities with the SEC. These must be offered exclusively on a registered exchange.https://t.co/5OPHuBz49e
— Dr Craig S Wright (@ProfFaustus) November 19, 2018
The Tweet was met with harsh criticism to Craig Wright from XRP’s very vocal community.
Pay₿is, a Cryptocurrency exchange ensured Craig Wright gets back into his senses with a logical reply.
They might just register with SEC or pay a fine and continue like EtherDelta. SEC are not so dumb to crash the billion market cap, their primary target is consumer/investor protection.
— Pay₿is (@PayBis_com) November 19, 2018
Is Craig Wright Right about XRP being a Security?
A security in financial terms is determined using the Howey Test’s four simple questions. These are-
Is it an investment of money/assets? Ripple states that XRP is a digital asset created by Ripple which is sold. Hence it is not an investment vehicle.
Is there an expectation of profits from the investment? Ripple has never promised that investors that ‘Hodl’ XRP will gain more value from it.
Is the investment of money/assets in a common enterprise? It seems to be a point which Ripple will have to answer with substantial evidence to the SEC as Ripple owns 80% of XRP. Thus manipulation of XRP is possible with Ripple having control of most of the supply.
Any profit comes from the efforts of a promoter or third party
XRP’s price is determined by market factors, which are the people buying and selling and so Ripple has no problem with this point.
The dangers of Craig Wright being right about XRP being a security is almost one to a thousand. However, there are dire consequences if he is right. If XRP is confirmed as a security, the holders of XRP will have a share of Ripple. Along with this, the primary objective of cross-border transactions will become almost impossible as different countries have various laws about securities.
Disclaimer: Blockmanity is a news portal and does not provide any financial advice. Blockmanity's role is to inform the cryptocurrency and blockchain community about what's going on in this space. Please do your own due diligence before making any investment. Blockmanity won't be responsible for any loss of funds.
Did you like the news you just read? Please leave a feedback to help us serve you better