Zach Rector, a cryptocurrency advocate and media personality, has revealed his insights on the case regarding the security nature of XRP while drawing a comparison to the traditional store of value (Gold).
Zach Rector Confirms The True Nature Of XRP
The crypto advocate took to the social media platform X (formerly Twitter) to share and confirm his observations on the digital asset’s nature with the crypto community on Thursday.
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According to Zach Rector, just like the conventional store of value (Gold), XRP is both “a currency and a commodity,” suggesting similarities in investment value between the two assets.
Rector’s X post came in response to Ripple’s Chief Technology Officer (CTO) David “JoelKatz” Schwartz’s post also emphasizing the crypto asset’s true nature, and refuting claims that the coin is a security.
In the post, David Schwartz affirms that XRP traded in commerce is a “raw good.” Additionally, he stated that “each XRP is considered to be equivalent to other existing XRPs.”
Furthermore, he noted that this is what classifies an asset as a commodity, underscoring the token’s nature as a commodity. Schwartz also addressed the claims regarding the coin’s value being derived from external “legal obligations.” Schwartz also stated that “No third party’s legal obligations to holders contribute to the value of XRP in any way.”
He explains that an investor does not anticipate receiving extra payments, having the ability to vote, or having Ripple raise prices. Rather, market factors, including supply, demand, and investor opinions, determine value.Â
Rector’s insights have triggered a stir within the crypto community, with several members expressing their displeasure in his comparison. A pseudonymous X user refuted Rector’s claims noting that XRP is not gold. They explain that this is because “Gold is money,” while the crypto asset is a readily “inflated currency exclusively used by banks.”
Meanwhile, another user also stated that instead of considering it to be an actual currency, he would much rather think of it as a “Neutral Bridge Asset, potentially backed by gold.”
The Background Of The Allegations
It is noteworthy that the United States Securities and Exchange Commission (SEC) filed a lawsuit against Ripple in 2020, claiming that the firm sold XRP in an unregistered securities sale, suggesting the token boasts a security nature.
The SEC claims that by selling the asset to investors without registering the tokens as securities or demanding an exemption from registration, Ripple participated in an unlawful securities offering.
However, in July last year, United States Judge Analisa Torres ruled that the digital asset is not a security, serving as a partial win for the payment company in its legal tussle with the Commission.
Judge Torres’ ruling states that when offered for sale to institutional buyers, it could be considered a security; but when offered to individual or retail investors via digital asset exchanges it is not a security.
