Cryptocurrency enthusiast and media figure Zach Rector has shared his thoughts on XRP security and made a comparison to gold, a conventional store of value.
Zach Rector Verifies XRP’s Genuine Nature
On Thursday, the cryptocurrency proponent used the social media site X, which was once known as Twitter, to inform and validate the cryptocurrency community of his views regarding the characteristics of digital assets.
Zach Rector claims that XRP is “a currency and a commodity,” implying that the two assets have comparable investment value to gold, the traditional store of value.
Rector’s X article reacted to a post by David “JoelKatz” Schwartz, the Chief Technology Officer (CTO) of Ripple, which likewise emphasised the underlying nature of the cryptocurrency asset and disproved the notion that it is a security.
David Schwartz confirms in the post that XRP is a “raw good” when traded in commerce. He also said, “Every XRP is thought to be equivalent to other existing XRPs.”
In addition, he pointed out that this is what makes an asset a commodity, highlighting the commodity status of the token. Schwartz responded to the assertions that the coin’s worth was established by outside “legal obligations.” Additionally, Schwartz said, “No third party’s legal obligations to holders contribute in any way to the value of XRP.”
He clarifies that an investor does not expect Ripple to hike prices, receive more payouts, or have voting rights. Market forces like supply, demand, and investor sentiment instead determine value.
Rector’s observations have caused a stir in cryptocurrency, as several people have disapproved of his comparison. An anonymous X user disputed Rector’s statements, who pointed out that XRP is not gold. They clarify that this is because, unlike the crypto asset, which banks exclusively use as an easily “inflated currency,” “Gold serves as money.”
Another user, meanwhile, said he would much prefer to conceive of it as a “Neutral Bridge Asset, potentially backed by gold,” as opposed to a real currency.
The History Of The Complaints
In 2020, the US Securities and Exchange Commission (SEC) sued Ripple, alleging that the company sold XRP in an unregistered securities sale, suggesting that the coin possesses securities characteristics.
According to the SEC, Ripple engaged in an illegal securities offering when it sold the asset to investors without registering the tokens as securities or requesting an exemption from registration.
Nevertheless, according to a July 2017 ruling by US Judge Analisa Torres, the digital asset is not a security, giving the payment business a partial victory in its legal battle with the Commission.
According to Judge Torres’ decision, an offering made to institutional buyers might qualify as a security; however, an offer made to individual or retail investors through digital asset exchanges does not qualify as a security.
