Is XRP a Commodity or a Security? CFTC Chairman Has No Idea
Heath Tarbert, the Chairman of the U.S. Commodity Futures Trading Commission (CFTC) has said it isn’t yet clear whether the XRP token is a security or a commodity.
During an interview with news outlet Cheddar, Tarbert was asked whether new cryptocurrencies other than bitcoin and ether will be falling under the CFTC’s jurisdiction, with XRP being used as an example. Tarbert replied:
It’s unclear. Stay tuned I’d say. Part of the issue is that our jurisdiction we share with the SEC [Securities and Exchange Commission]. If it’s a security, it falls under their jurisdiction. If it’s a commodity, it falls under ours.
The CFTC Charmain noted that the organization has been working closing with the Securities and Exchange Commission (SEC) to figure out which cryptoasset are securities, and which cryptoasset are commodities.
Bitcoin, the flagship cryptocurrency, and ether, the largest altcoin by market capitalization, are commodities as Tarbert has in the past revealed both cryptocurrencies fall under the CFTC’s jurisdiction.
At the time, Tarbert said:
We’ve been very clear on bitcoin: bitcoin is a commodity. We haven’t said anything about ether—until now. It is my view as chairman of the CFTC that ether is a commodity.
Tarbert has late last year also acknowledged there’s “ambiguity in the market” on the status of various cryptoasset, adding he believes “similar digital assets should be treated similarly.” When talking about cryptoasset sold via initial coin offerings (ICOs), he also noted an asset can start off as a security and become a commodity.
Whether XRP is a security has been debated for long now. In 2018, several XRP investors filed a lawsuit against Ripple over the token, claiming the firm violated state and federal securities laws. In response, Ripple argues that XPR isn’t a security because it’s “not an investment contract.”
Featured image via Pixabay.