Ripple and XRP have been questioned during the last years regarding the legal status of the XRP digital asset. Can XRP be considered a security or it is just FUD that the market is spreading around XRP? At the SXSW event in Austin, Texas Ripple’s CTO, David Schwartz, gave an explanation about why XRP is not considered a security.
At the “Blockchain Beyond the Hype: The Ripple Effect” session at the SXSW, Schwartz explained how XRP was created and how it is linked to Ripple. As reported by Decrypt, Schwartz said that XRP was created when Arthur Britto, Jed McCaleb and Chris Larsen, built the XRP ledger in 2011 and 2012. Schwartz was also among this group of individuals.
Nonetheless, Ripple Labs was also created by McCaleb and Larsen. These two individuals “gifted” themselves the tokens they’ve created and sold it to start their company. Thus, can this be considered an Initial Coin Offering (ICO)?
The U.S. Securities and Exchange Commission (SEC) has been trying to go behind ICOs that were launching unregistered securities to the market. Nonetheless, William Hinman, the SEC Director, said that Bitcoin (BTC) and Ether (ETH) are not securities.
In front of the audience, Schwart said:
“We've gotten writings from some organizations – the SEC recently has talked about how they’re going to think about deciding how these tokens meet securities laws. But they have not given a black and white test.”
He went on saying that it is difficult to decide whether the Howey Test applies or not to cryptocurrencies. At the moment, he said that they are “pretty comfortable that XRP is not a security.” However, he accepts that the SEC – and perhaps courts – will have to take that decision.
Ripple is also facing different class-action lawsuits from investors in California. They claim that the company did not register XRP as a security within the SEC. As Decrypt reported, Schwartz says that they do not want regulators to approach the industry several years later trying to create regulations to companies that have been operating in a transparent and correct way.
Schwartz has also said that the firm must get rid of this uncertainty that is growing in the market regarding crypto regulations.
BeachHead Sings the Praises of Ripple’s Trading Engine
BeachHead is a game that is probably most well-known to the 1980s video gamers, categorized with more “shoot ‘em up” type of games. However, this happens to be one of the few games that has managed to transition into today’s culture, now as a virtual reality (VR) game, though it is still in the developing stages. A recent video was published by BeachHead to promote the game, adding that it will include virtual currencies in an important role.
Within the video, the consumer learns plenty of information about the way the game will work, but one interesting highlight is the way that the company shows appreciation to Ripple. The creator of BeachHead, Pepe Moreno, noted that the game appears to be anchored in crypto-economics, saying that the game includes anything in “the real world,” using shoe selling to entertainment as examples.
The CTO and blockchain economy director of BeachHead, Alexis Sirka, discussed the role of the Ripple Trading Engine, which was added for its maturity above all other trading engines in the industry. With a four-second settlement time, Sirka called it “perfect” for their trading purposes. Furthermore, the fast trade matching works with the needs of the BeachHead game.
The game allows “any kind of economy” to grow, and they believe that, in relation to the Ripple protocol’s implementation, it is “the next natural step” for token trading. Brad Garlinghouse, the CEO of Ripple, had spoken at the Ethereal Conference in Davos, saying that this appears to be a place when the use of blockchain is “underhyped.” He added that he thinks that there are several games being created with the use of the XRP Ledger, and that this will be a “very interesting space” to follow this year.