‘XRP Is A Cryptocurrency, Not A Security’ Says Japan’s Chief Securities Regulator (FSA)
While this may or may not help US regulators form an opinion, it provides some comfort to XRP holders in the US.
In its first statement ever on XRP, Japan’s Financial Securities Authority (FSA) confirmed that XRP is not a security – calming the XRP army's nerves after the recent lawsuit battles Ripple Inc. has faced from the U.S. Securities Exchange Commission (SEC). Confirmed by TheBlock, the FSA confirmed that XRP is deemed a cryptocurrency under its laws and not a security. An email sent by the FSA reads,
“FSA regards XRP as a cryptocurrency based on definitions of the Payment Services Act.”
However, the email distanced itself from the SEC's recent lawsuits, charging Ripple Inc. for selling XRP as a security. The statement reads,
“FSA refrains from making comments about other authorities' response.”
Japan’s Payment Services Act defines a cryptocurrency (or ‘virtual currency’ as it is termed) as an electronically transferrable property value that can either be “used concerning unspecified persons to pay consideration for the purchase or leasing of goods or the receipt or provision of services” or “mutually exchanged with what is outlined in the preceding item with unspecified persons acting as counterparties.”
This excludes any currency-denominated asset, whether the Japanese Yen or foreign currencies. XRP fits into this definition, and the close relationship with Ripple does not make it a security, a spokesperson familiar with the matter said.
Ripple investor and Japanese conglomerate SBI Holdings recently addressed the lawsuit by the SEC on Ripple, stating that it will continue to support XRP in its operations. The financial giant stated its conviction that XRP is not deemed a security in Japan; hence they will continue to support it.
Japan could offer Ripple a haven given the well-defined crypto regulations in place. Brad Garlinghouse, Ripple CEO, has stated his desire to leave the U.S. due to murky regulations in the crypto space, with Japan and Singapore offering potential homage for the blockchain company.