An analyst from the economic research firm Nomura Research Institute, Sadakazu Osaki, has argued that the XRP token is not a security. Key Ripple partner SBI Holdings, a financial giant that has even distributed XRP to shareholders, echoed Osaki’s sentiment.
According to a report published by the analyst, first spotted by Bitcoin.com, the XRP token is seen in Japan as a cryptoasset, according to the Funds Settlement Act. Securities are to be registered with the Financial Services Agency (FSA) for “offering or sale,” which would mean the token cannot be categorized as a security.
The researcher added that this means the U.S. Securities and Exchange Commission’s lawsuit against Ripple Labs will not have an impact on the token’s status in Japan. Osaki pointed out that XRP is popular in the country and is “widely traded” among local crypto trading platforms.
The researcher added:
It can be said that the interpretation that it does not fall under ‘securities’ under the Financial Instruments and Exchange Act, which requires the submission of a document, has been established.
Financial services giant SBI Holdings, a well-known Ripple partner and XRP supporter, echoed Osaki’s views and states exchanges will keep on trading the cryptocurrency in accordance with local laws, established by the country’s regulators.
SBI, it’s worth noting, has long been supporting XRP. Earlier this year, t gave its shareholders the option to receive XRP as a benefit. It allowed shareholders with 100 to 1,000 shares in the registry as of March 31, 2020, or shareholders with over 1,000 shares for less than one year to choose a benefit of 2,000 yen in XRP ($18) or a selection of health products. The benefit was restricted to shareholders residing in Japan.
In October SBI e-Sports, a subsidiary of the Japanese financial services giant, announced that it hired two players to its professional team, and would pay them their entire salaries in XRP.
The U.S. Securities and Exchange Commission (SEC) has, one day before former Chairman Jay Clayton resigned, announced it had “filed an action against Ripple Labs Inc. and two of its executives, who are also significant security holders, alleging that they raised over $1.3 billion through an unregistered, ongoing digital asset securities offering.”
The price of XRP has plunged in response to the lawsuit, with several cryptocurrency exchanges including Coinbase, Beaxy, Crypto.com, Bittrex, and others announcing they will temporarily halt trading while monitoring developments.
XRP’s price has seemingly started stabilizing around the $0.20 mark. While it briefly dipped to $0.18, it has since recovered and is now trading at $0.21. The recovery comes at a time in which Ripple issued a statement on the lawsuit, pointing out it affected retail investors with no connection to the firm.
Featured image via Unsplash.