Japan's financial regulator, the FSA has shared their comments on the legal status of Ripple's XRP, saying that they do not the token to be a security.
January 14, 2021 | AtoZ Markets – The Japan Financial Services Agency (FSA) treats XRP as a cryptocurrency, not a security. The regulator first outlined the legal status of the token in a email to The Block.
Japan’s FSA: XRP is a cryptocurrency and not as a security
According to the comments from the FSA, XRP is a cryptocurrency based on the definitions of the Japan Payment Services Law. Under the law, a digital asset is a "cryptocurrency" or "virtual currency" when it is used as a means of payment and is not denominated in fiat.
"FSA regards XRP as a cryptocurrency based on definitions of the Payment Services Act. FSA refrains from making comments about other authorities' response."
Last month, the Nomura Research Institute wrote in a report that XRP is a crypto asset, not a security. In December, Japanese financial giant SBI Holdings backed the researchers' stance.
As AtoZ Markets reported, the UK Treasury also does not consider XRP to be a security.
"Exchange-traded tokens such as Bitcoin, ETH and XRP are not subject to regulation," the UK agency said in a January statement .
As a reminder, on December 23, the US Securities and Exchange Commission (SEC) filed a lawsuit against Ripple. According to the department, the company sold unregistered securities in the form of tokens.
The CEO of the California-based blockchain company Brad Garlinghouse denied the charges and promised to defend Ripple in court. Preliminary hearings will take place on February 22, 2021.
Grayscale Liquidates Its XRP Trust
In a related development, leading crypto trust firm, Grayscale investment, has announced that it would be dissolving its XRP Trust citing the lawsuit filed by the SEC against the crypto firm.
According to Grayscale, it was important to take this step now as the United States has become increasingly hostile to XRP. So in its bid to protect its US investors, the XRP Trust has to be dissolved.
The company also noted that converting XRP into fiat US currency is going to be much more difficult in the future.
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