Ripple’s Deal With US Treasury Defines XRP As A Currency And Not A Security

The greatest point of concern in the Ripple community has dependably been whether it will be classified as a currency or security. After the US Securities and Exchange Commission (SEC) elucidated its position on Bitcoin (BTC) and Ethereum (ETH) that they are not securities and won’t be regulated accordingly, investors have been sitting tight to something on Ripple. However, nothing has been said on Ripple yet.

Nonetheless, an agreement between Ripple Labs and US Financial Crimes Enforcement Network (FinCEN) in 2015 has been revealed. The definition set by FinCEN in the agreement can’t be superseded by the SEC as noted out by the Twitter user Richard Holland:

As per the FinCEN news report, Ripple has been charged with a fine of $700,000 for “acting as a money services business (MSB) and 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.” Since at that point, the company has worked as needs be on its business practices. However, certain statements in the agreement could conceivably influence the classification of XRP.

The agreement states:

“The currency of the Ripple network, known as “XRP,” was pre-mined. In other words, unlike some other virtual currencies, XRP was fully generated prior to its distribution. As of 2015, XRP is the second-largest cryptocurrency by market capitalization, after Bitcoin.”

Holland is essentially an entrepreneur and XRP wallet creator who says“These are the agreed facts of the settlement where FinCEN agrees with prejudice that XRP is a currency and therefore not a security. This debate is over.” And additionally notes:

As of late, Brad Garlinghouse, Ripple’s CEO said in an interview:

“Whether or not XRP is a security shall not be dictated by one lawsuit. The SEC is the governor of that. I think it is very clear that XRP is not a security. It exists independently of Ripple the company. If Ripple, the company shut down tomorrow, XRP will continue to exist.”

Right now, Ripple is facing lawsuits that claim XRP is a security and controlled by Ripple. Accordingly, the company has enlisted previous SEC authorities to represent to them in court.


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