SEC Weighs Commodity Classification for XRP

According to FOX Business reporter Charles Gasparino, the SEC Ripple discussions are focusing on whether XRP should be classified similarly to Ethereum

The U.S. Securities and Exchange Commission (SEC) is considering classifying ​​XRP as a commodity, according to a report by Charles Gasparino.

The regulator is discussing the possibility of classifying XRP similarly to Ethereum, which is currently regarded as a commodity despite being initially funded through an Initial Coin Offering (ICO).

Eleanor Terrett reported that the SEC is discussing whether to classify XRP as a commodity rather than a security.

Gasparino noted that the SEC officials are debating whether, like ETH, XRP has evolved beyond its initial sale structure and now functions primarily as a Ripple cryptocurrency. If the SEC reaches this conclusion, it could be a major win for Ripple Labs and would alter the regulatory landscape for digital assets significantly.

According to reports, the legal team is pushing for more favorable settlement conditions, arguing that the SEC has shown leniency toward other crypto firms.

In particular, they highlight Judge Analisa Torres’s ruling in July 2023, where she declared that XRP is not inherently a security.

The company maintains that agreeing to the settlement now would be viewed as an admission of guilt for engaging in unlawful securities offerings, even as the regulator appears uncertain about its own legal arguments.

The ongoing negotiations include discussing the possibility of reducing the $125 million to be paid by Ripple Labs and revising restrictions related to selling XRP to institutional investors, as reported by FOX Business journalist Eleanor Terrett.

The price of XRP has reacted positively to the reports of a potential settlement, surging past $2.34, reflecting a 23% over the past week.

The possibility of an SEC settlement and clearer regulatory status has fueled optimism among investors, prompting some to buy XRP in anticipation of a bullish breakout.

According to Bloomberg ETF analyst James Seyffart, the approval of an XRP ETF depends on regulatory clarity.

If the SEC XRP case concludes with a commodity classification, it could open the door for institutional investments in Ripple exchange-traded funds.

Recently, a proposal submitted to the SEC suggests reclassifying XRP as a payment network rather than a security.

The proposal, submitted by Maximilian Staudinger, highlights how Ripple XRP news can be instrumental in releasing liquidity in Nostro accounts, which has the potential to free up to $1.5 trillion of stalled capital. This move could revolutionize cross-border payments, making Ripple’s ledger a central piece of financial institutions.

The proposal suggests that some of the released capital could be used to buy Bitcoin, positioning Ripple USD as a key component of the U.S. digital economy.

This analysis has been generated by Benzinga and updated by Webmasters, taking into account macroeconomic events, technical analysis, and relevant news updates.