According to recent rumors, the SEC is considering reclassifying the XRP token as a commodity. The Commission is apparently comparing XRP to ETH, which was reclassified in the past.
A recent report by Charles Gasparino for Ftx us suggests that the Securities and Exchange Commission (SEC) might be considering reclassifying the XRP token as a commodity. This possibility arises as the SEC is planning to cooperate more closely with the Commodity Futures Trading Commission (CFTC), the report claims.
The article highlights that the Commission is comparing XRP to ETH, which was previously classified by the CFTC as a commodity in a no-action letter from 2021. The report further mentions that state financial regulators in Vermont have also dropped their suit against Coinbase following the SEC’s announcement of a new Crypto Task Force.
In 2022, Vermont and several other US states sued Coinbase, claiming that its staking services violated securities laws. However, in a statement today, Coinbase’s Chief Legal Officer announced that Vermont dropped its charges, citing the SEC’s new paradigm.
“The SEC has announced the formation of a new task force to, among other things, provide guidance for the promulgation of rules regarding the regulation of cryptocurrency products and services. In light of the administrative tasks assigned to the SEC staff and the likelihood of new federal regulatory guidance, the Division will rescind the pending Show Cause Order, without prejudice.”
This statement from Coinbase's Chief Legal Officer indicates that one state already acknowledges the Commission's new guidelines to be a factor in dropping its case.
If the SEC decides that it was previously too harsh to Ripple, it would be within its rights to reclassify XRP, especially since it's a common practice for financial institutions to adjust their stances.
Moreover, if XRP is classified as a commodity after April 16, it would immediately increase or even confirm the likelihood of XRP ETF approvals. Overall, such a scenario would be extremely bullish for the third-largest altcoin.
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