Ripple’s Deal With US Treasury Defines XRP as a Currency, Not a Security
Will an agreement between Ripple Labs and the US Treasury Department 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.”
The company has since modified its business practices to ensure future compliance, and now a paragraph within the agreement could have an impact on the 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 prior to its distribution.
Ripple is facing two class action lawsuits that allege XRP is a security controlled by Ripple. The company is pushing back against the claims and has hired two former SEC officials to represent it in court.
In response to 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 made no mention of XRP.