The manager said that it is not clear in which definition to classify Ripple (XRP) and that the CFTC works with the SEC to establish clear rules.
Heart Tarbert, current president of the Commodity Futures Trading Commission of the United States (CFTC), said that at the moment it is not clear whether Ripple’s cryptocurrency, XRP, should be considered as a security or as a commodity.
The statements of the director of the CFTC contrast to a certain extent with the comments issued at the time in relation to Bitcoin and Ether, crypto assets that he classified as commodities taking away merit to their possible utility as values based on the provisions present in American laws
Regarding XRP, Tarbert commented:
“It is not clear. I would recommend to those who are very attentive … Part of the problem is that we share our jurisdiction with the Securities and Exchange Commission (SEC). If it is a security, it falls under that direction, but if it is a commodity, it falls within ours.”
The agency’s director said that they have been working closely with the SEC for a year, precisely to address more precisely under what classification each case falls.
A Ripple dilemma
Tarbert acknowledged that CFTC’s Ripple (XRP) case is much more complicated, since the third cryptocurrency with the highest volume of operations received several lawsuits in 2018 from investors, who claimed that the digital asset operated against the provisions legal handled for the values at state and federal level. For their part, the managers of the responsible company ensure that the digital currency cannot be classified as a security because it does not constitute an investment contract.
About Bitcoin and Ether, Tarbert reiterated that the main cryptocurrency is a commodity, and on the other digital currency, although there is no official pronouncement, he believes as president of the agency that said asset also falls within the same definition.
For its part, Ripple is among the most recognized crypto assets within the banking ecosystem, since the digital currency is a central element of the large number of solutions and services designed by the company for the international payments ecosystem, such as RippleNet and xRapid.
Finally, in relation to cryptocurrency derivatives in regulated markets, Tarbert said that these types of products will bring more confidence for institutional investors, so the CFTC is helping to create rules for future crypto, with which would help to manage more effectively the risks inherent in this ecosystem.