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Cardano Founder Says XRP Should Be Regulated as Commodity, Here’s Why

Sat, 10/08/2022 - 09:03
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Yuri Molchan
Charles Hoskinson clarifies his attitude towards the Ripple-SEC lawsuit, says XRP should be regulated as a commodity
Cardano Founder Says XRP Should Be Regulated as Commodity, Here’s Why
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In a recent series of tweets, founder of IOG and Cardano Charles Hoskinson decided to clarify his stance on the SEC lawsuit against Ripple Labs, saying that he has been “hit hard” by some members of the XRP army for his recent comments on Ripple’s issues with the securities regulator.

He does not believe that XRP is a security and this suit against Ripple is absurd and that XRP should be regulated as commodity.

“Most layer 1 protocols aren’t securities”, "they are commodities"

Cardano founder wrote that he believes the majority of layer 1 protocols (which includes XRP) are not securities, since they offer utility and have a sufficient degree of decentralization in them, plus they pass Howie test which shows whether an asset is a security or not.

Basically, Hoskinson believes XRP to be a commodity, likening it to oil and even baseball cards. However, he warns, if you try to securitize oil or cards, you have “obvious issues and information asymmetries”.

Hoskinson admits that cryptocurrencies do need regulation to keep markets stable and well-functioning, actors must be kept an eye on and cartels need to be examined. It is regulation for commodities that suits here best, he stated.

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“Ripple ecosystem will survive its creators”

Another argument given by Hoskinson towards XRP being a commodity is that “commodities survive those who aggregate them”. In the case of Ripple, he wrote that the company has created “something that has an ecosystem that will survive Brad [Garlinghouse, CEO], Chris [Larsen, former CEO, co-founder], David Schwartz (CTO) or anyone else”.

Full-scale criticism from XRP army towards himself, Hoskinson believes to be “proof of this reality”. XRP ledger, he adds, will operate for decades trading value, he added.

In his final tweet in the thread, he wrote about “absurdity of applying securities regulation” to XRP – “something that has millions of independent participants in more than a 100 countries who cannot be controlled by any fiduciary of a single company.”

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About the author

Yuri is a crypto journalist interested in technology and technical innovations. He has been in crypto since 2017. Believes that blockchain and cryptocurrencies have a potential to transform the world in the future in many of its aspects. ‘Hodls’ major cryptocurrencies and has written for multiple crypto media outlets. 

His articles have been quoted by such crypto influencers as Tyler Winklevoss, John McAfee, CZ Binance, Max Keiser, etc.

Currently Yuri is a news writer at U.Today and can be contacted at yuri.molchan@u.today.

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