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XRP: the third largest cryptocurrency in the world (or is that second now?) with a market cap of over $12 billion, and one of the most loyal communities in crypto acting as around the clock marketing team; So why isn't XRP on Coinbase yet?
Throughout 2018, despite months upon months of campaigning, pleading and in some most cases whining to get a listing, Coinbase remained ambivalent towards XRP and its ‘army’.
Intermittent within the aforementioned campaigning, pleading, and whining, were rumors that Coinbase had decided to list XRP; rumors that tremendous an impact on price, especially in March when XRP rose to $1.08. Of course, speculation was ultimately proven false.
It's certainly not for lack of trying, Ripple even tried to bribe their way in, back in April last year when the firm attempted to bribe Coinbase by offering to lend the exchange $100 million worth of XRP to start letting users trade the asset. All to no avail…
Until suddenly. News flash.
Coinbase releases a list of 30 cryptocurrencies that they're “exploring”.
A multitude of prayers had been answered, XRP made the list…
“Being explored? That’s not good enough!” the XRP army exclaimed “… I know! Let’s incessantly tweet to Coinbase until they add XRP!”
The firm is accused of controlling a dominating share of XRP, essentially classifying the asset as a security.
Due to this accusation, some of the claimant’s assert that they were misled by the investment structure they bought into. In their eyes, XRP is a security - similar to a share in the company - and therefore Ripple violated securities law, by not keeping investors clued up about pertinent decisions as per the Securities Exchange Act of 1934.
Is XRP a security?
The SEC currently use the Howey test to decide whether or not a digital asset should be classed as a security.
Designed by the Supreme Court in 1946 the test filters out four deciding factors including; an investment of money in a common enterprise, an expectation of profits from said investment and if any profits come from the efforts of a third party promoter.
The initial lawsuit filing argues that XRP fulfills all these criteria and is therefore classified as a security:
“The XRP offered and sold by the defendants had all the traditional hallmarks of a security, yet defendants failed to register them as such… XRP purchasers reasonably expected to derive profits from their ownership of XRP, and [Ripple] themselves have frequently highlighted this profit motive.”
So, if found to be a security by the federal court, claimants would be in for a windfall, and Ripple would be in for a … fall.
Not everyone believes XRP is a security, this apparently includes CZ, CEO of Binance:
