XRP is a security; Ripple is committing fraud via non-compliance: Berkeley researcher |
Similar to a recent statement made by a former SEC [US Securities and Exchange Commission] employee on the dilemma of XRP being a security or not, another expert, Nicholas Weaver, came up with his own conclusion on the subject. Weaver, who is a researcher at Berkeley, CA made a bold remark that XRP is a security and Ripple, the company, is committing fraud via non-compliance. In his tweet, he mentioned:
“Lets walk through the “Howey Test” with XRP (“Ripple”). This is why @SEC_Enforcement needs to come down like a ton of bricks on those behind Ripple the company… XRP is a security, and as such Ripple Inc is committing securities fraud by not following the rules.”
Further, he put the third-largest cryptocurrency in the world to the Howey Test laid out by the Supreme Court in 1946. It is a test that asks four questions to check if an asset is a security, namely, an investment of money, a common enterprise, expectation of profits, and the efforts of a third-party or promoter pushing that profit. Weaver’s second tweet in the series read:
“#1: “Is it an investment of money?” Hell yeah. People put their money in XRP, and literally call it an “investment”. So lets check #1.”
He continued the post and mentioned that XRP also follows the second rule, stating that the expectation of profit exists in the case of the coin. The third factor, i.e., a common enterprise must exist for the investment of money, was also passed by the cryptocurrency. Moreover, the fourth criteria regarding profits was met as well.
Concluding his analysis, Weaver stated:
“In fact, basically any ICO not restricted to accredited investors where there is the quiet part of “yeah, this is for a ‘product’, but you don’t want the product, you can sell the token to someone else” fails the Howey test. Including Ethereum.”
Nouriel Roubini, who has gained much popularity in the blockchain and cryptocurrency space of late, also commented on the tweets, tagging XRP as a non-compliant security. However, any remarks or replies from the officials of Ripple have not been observed yet.
The post XRP is a security; Ripple is committing fraud via non-compliance: Berkeley researcher appeared first on AMBCrypto.