When asked about XRP’s regulatory status during her recent Bloomberg interview, the U.S. Securities and Exchange Commission's Hester Peirce said that a cryptocurrency doesn’t necessarily have to be a security if its issuer gets sued by the agency.
Peirce—who has earned the “Crypto Mom” moniker for her vocal support of the crypto industry—claims an enforcement action means that the asset was being sold as an investment contract:
When we think about a crypto asset as being a security what, we’re doing is we’re saying it’s being sold as part of an investment contract, which means that there are promises being made around the sale of this asset. It doesn’t mean that the asset itself necessarily has to be a security. It means that it was being sold as a security.
Peirce believes that the SEC needs to provide more regulatory clarity before the agency spends too much time on non-fraud cases.
Ripple insists XRP is not an investment contract
Distributed ledger tech provider Ripple was taken to court back in May together with its two high-profile executives, Chris Larsen and Brad Garlinghouse, over their unregistered XRP sales that allegedly violated federal securities laws.
The defendants, however, argue that its sales and distribution of the cryptocurrency were not investment contracts since XRP holders do not have any stake in the company.
As reported by U.Today, the court recently greenlit the SEC’s request for a two-month discovery extension in the Ripple case, which means that the case might stretch well into 2022.