The government of the United Kingdom has described the XRP token as an “exchange token” in an example given in a new document outlining the country’s regulatory approach to cryptoassets and stablecoins.
According to the document, published by Her Majesty’s Treasury, XRP is, just like Bitcoin and Ethereum, seen as an “exchange token” which is described as a token whose primary use is as a medium of exchange. The document classifies these as “unregulated tokens” that are “neither e-money tokens nor security tokens.” It reads:
- Exchange tokens: tokens that are primarily used as a means of exchange – this includes widely known cryptoassets such as Bitcoin, Ether and XRP
As reported by Daily Hodl, the document was referencing a framework laid out by the Financial Conduct Authority (FCA) back in 2019, and explains that security tokens have “characteristics akin to specified investments, like a share or a debt instrument, as set out in UK legislation.”
It adds security tokens are “likely to be tokenised, digital forms of traditional securities.” It’s worth noting that the document’s example of XRP as an unregulated exchange token comes at a time in which Ripple Labs faces a lawsuit from the U.S. Securities and Exchange Commission (SEC) alleging the firm and two executives “raised over $1.3 billion through an unregistered, ongoing digital asset securities offering.”
Ripple has previously highlighted the FCA’s classification as it called for regulatory clarity in the United States. Since the lawsuit has been filed the price of XRP plunged from about $0.6 to a $0.18 low before recovering. The plunge was accelerated by a string of delisting announcements from major cryptocurrency exchanges, including Bitstamp, Coinbase, Binance.US, Bittrex, and others.
The firm has argued that the SEC’s lawsuit has hurt “countless innocent XRP retail holders with no connection to Ripple,” and added it “muddied the waters for exchanges, market makers, and traders.”
Cryptocurrency exchange Uphold, as reported, revealed it will maintain the XRP token listed on its platform until the U.S. Securities and Exchange commission’s (SEC) lawsuit against Ripple Labs is resolved. Uphold said in an announcement that the SEC’s goal is to protect consumers, and believes it’s hard to see how a “judgement rendering XRP essentially worthless and inflicting billions of dollars of losses on retail investors” would square with that goal.
Featured image via Pixabay.