A new agreement between Ripple Labs and the US Treasury Department could change XRP’s fate.
But will the agreement be enough to convince the SEC that XRP is not a security?
Ripple signed a settlement agreement with the Treasury’s Financial Crimes Enforcement Network (FinCEN) in 2015, paying a $700,000 fine for “selling its virtual currency, known as XRP, without registering with FinCEN, and by failing to implement and maintain an adequate anti-money laundering (AML) program designed to protect its products from use by money launderers or terrorist financiers.”
A paragraph could change the way in which XRP is classified
The company also modified its business practices to ensure future compliance, and there’s a specific paragraph in the agreement that could have a massive impact on the whole neverending debate on how XRP should be classified.
The ‘Statement of Facts and Violations’ in the agreement outright defines XRP as a currency that was pre-mined before its distribution.
Ripple is currently faced with two lawsuits that claim that XRP is a security that’s controlled by Ripple. The company pushed back all the claims and also hired two former SEC official to be represented in the court.
Regarding the lawsuits, a spokeswoman at Ripple told CoinDesk, “This is just another example of an extortionist bringing forth an opportunistic suit that lacks merit. We feel confident that the claims regarding XRP are completely unfounded both in law and fact.”
A regulator at the US Securities and Exchange Commission recently declared Bitcoin and Ether are not securities and did not mention anything about XRP.
We’ll just have to wait and see if the SEC decides something regarding Ripple as well, especially after the settlement agreement that was signed between Ripple and the US Treasury Department.