Coinbase Receives Request from Ripple to List XRP Coin on Exchange
Ripple's CEO Wants Coinbase Exchange to Add XRP Token to Trading Platform Sooner than Later
Ripple has been highly publicized in the media lately, which is largely due to their fast and transparent transactions. In fact, it is presently the third-largest cryptocurrency in the world with their market cap. However, CEO Brad Garlinghouse aims to expand their reach, submitting a request to Coinbase to list their crypto token XRP on their investment platform after declaring they would be supporting Ethereum Blockchain ERC20 tokens in the future.
Coinbase has been extremely meticulous about the currencies that they let on their platform, specifically shying away from currencies that could potentially be listed as a security. This may have been influenced by the impression that Ethereum gave as the SEC suggested classifying it as a security. Since then, they decided that Ethereum’s decentralization was too much for it to be considered a security, so this concern is no longer an issue.
The XRP token is much different than a standard security. Recently, Ripple Labs was the victim of a class action lawsuit, which was filed in San Francisco. The suit was filed in superior court by Ryan Coffey, who invested in XRP and claims that the token has always been a security. Much of this suggestion is the result of comments made by the SEC already and the online discussions about XRP. If the court rules in favor of Coffey, then XRP would most likely be rejected by Coinbase with its security status.
Unlike typical lawsuits against cryptocurrency that suggest fraudulent transactions and issues with ICOs, this concern seems to be a matter of what qualifies a token as a security. If the plaintiff wins, the industry may have to rethink the classification of all tokens and how they are traded.
Still, Ripple continues to adjust their ecosystem. In fact, Garlinghouse spoke in New York City at the CB Insights Future of Fintech conference, where he encouraged Coinbase to add their token. He said, “As we solve problems at scale for institutions, I think it’s in Coinbase’s best interest to participate in that.”
At the conference, he took the time to express his reasons for wanting to be added to Coinbase’s platform.
“If Ripple, the company, shut down tomorrow, the XRP ledger would continue to operate. It’s open-source, decentralized technology that exists independent of Ripple. The people buying XRP – they don’t think they’re buying shares of Ripple. There’s a company called Ripple; we are a private company. We have investors, but buying XRP doesn’t give you ownership of Ripple. It doesn’t give you access to dividends or profits that come from Ripple. XRP is solving a problem; there’s no utility in a security,” he said.
There are many critics that say that Ripple’s ownership of over half of their tokens means a lack of decentralization. That fact alone puts them at risk for reaching “security territory,” which is another reason that Coinbase may still reject their wish.