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Key facts:
For Giancarlo, is a key factor in the own way in that Ripple offers the token.
Another factor is the behavior of market of XRP, according to the former head of the CFTC.
Christopher Giancarlo, former president of the Commission of Trade in Futures on commodities of the united States (CFTC, for its acronym in English) considers that XRP, the token created by Ripple Labs, may not be seen as a degree value. On the contrary, Giancarlo argues that several factors are crucial to ensure that on the third criptomoneda with the highest market cap, behind bitcoin, ether (ETH) and the stablecoin tether (USDT).
In an article published this Wednesday, June 17, at the specialized site IFLR, Giancarlo and the attorney Conrad Bahlke argue that XRP could meet only with a few points outlined in the “test of Howey”, a mechanism according to which they evaluate the qualities of an asset. Does not possess some of these characteristics, XRP not it you can consider an investment contract or a title valuewrote the former head of the CFTC.
Among the main arguments, the exejecutivo points to the investment. In the eyes of Giancarlo and Bahlke, in XRP no investmentbecause there are no agreements that include the transfer of a value “in exchange for a future performance”. Between Ripple and the holders of XRP there is no contract. “On the contrary, the contracts that Ripple has been subscribed to explicitly exclude the holders of general of XRP as third-party beneficiaries”, argued Giancarlo in his text.
In his view, the separation between XRP and Ripple is well understood among the participants of the market of cryptocurrencies. This is latent in the fact that “the price of XRP does not usually respond to developments related to Ripple”. In any case, follows the behavior of the rest of the market, led by bitcoin.
Giancarlo pointed out that, to qualify as a title value, XRP should not enter into the regulations as such. It should not be considered a guarantee, but a currency or medium of exchangehe concludes the text of the exejecutivo of the Commission of Trade of Future of the us.
The community takes the opposite view about Ripple and XRP
Contrary to these claims of Giancarlo, a group of investors believes that XRP could be a title value. So much so, that in a suit against Ripple alleging failure to comply with the Securities Law of the united States through the forma marketing of XRPas reported Breaking News in April of this year.
Then, in may, the company Bitcoin Manipulation Abatemen, located in Puerto Rico, filed a lawsuit which alleges that Ripple incurred on the sale of securities not registered to sell XRP.
As suggested by the authors, the behavior of the market of XRP does not respond directly to movements of the company that created the criptomoneda. Data of Coin Metrics show a strong correlation between the two assets higher than the 0.8 in the index Spearman. For this index, the more it approaches 1 the correlation is higher between the two assets compared.
As stated Giancarlo, the behavior of XRP has a high correlation with BTC. Source: Coin Metrics.
From mid-2018, such a correlation has not been below 0.6. That is to say, the behavior of XRP continues the BTC for at least two years ago.
The correlation data seem to support the thesis posed by the authors of the article. However, the same graph shows that above the correlation between XRP and bitcoin came to be in the negative, although the behavior of XRP was docked in the middle of the run upward of 2017.
Contrary to what exposed Giancarlo and Bahlke, in the environment of the cryptocurrencies there is a constant open discussion on the possible relationship between Ripple and XRP, beyond which the company is the creator of the criptomoneda. For some people in the community, even, Ripple and XRP are basically synonyms.