Key dealers
- SEC is considering classifying XRP as a commodity during decommissioning calls with Ripple.
- Ethereum’s regulatory treatment is an important point of comparison in the legal battle over XRP.
SEC is considering classifying XRP as an item in its ongoing settlement calls with Ripple Labs, reported Fox Business Senior Correspondent Charles Gasparino today.
SCOOP: By @EeleanortrettS scoop from yesterday on @Ripple – @Secgov Negotiation negotiations, a matter weighed by the Commission is whether $ XRP Continues to shop and have a tool that makes it more into a product and not a security. I hear …
– Charles Gasparino (@cgasparino) March 13, 2025
Gasparino said that securities regulators use ether as a benchmark to build a case to either classify XRP as a commodity or maintain its current classification. Ethereum, despite its first collection through a first coin range (ICO), is now considered by Sec to act as a “pure commodity.”
According to the reporter, Ethereum’s regulatory treatment has emerged as an important comparison Point, like Both XRP and ETH were initially used to finance blockchain network development.
Ripple earlier made it clear that it did not implement an ICO for XRP. Ripples CTO, David Schwartz and other officials insisted that XRP was preceded and distributed differently than typical ICO models.
Ripples Distribution Model has been a fighting as it differs from decentralized Cryptocurrency launches and has drawn review from supervisory authorities such as SEC, which accuses Ripple of selling unregistered securities.
Neither Ripple nor SEC have made public comments about the latest developments in the conciliation discussions.
XRP was controlled non-security
In a landmark decision in July 2023, the US district judge determined Analisa Torres XRP is not in itself a securityEspecially when traded in secondary markets. However, the Court found that Ripple’s direct sale of XRP to institutional investors constituted unregistered securities offers.
Whether a digital token is considered to be a security is currently determined by its compliance with the Howy Test’s investment contract requirements.
The decision in 2023 made it clear that the XRP sales through exchanges do not qualify as securities offers because buyers had no direct relationship with Ripple and were not aware of the company’s commitment. Distributions of XRP as compensation or payment for services were also decided not to constitute securities transactions.
Sec vs. Ripple mood application approaches conclusion
Fox Business Journalist Eleanor Terrett reported Wednesday that the legal battle between Sec and Ripple is Near a conclusionBecause the two parties work towards a resolution.
Ripples Legal Team is reportingly negotiated to adjustments to the decision, which imposed a fine of $ 125 million and restrictions on selling XRP to institutional investors.
Terrett said that ongoing discussions focus on adapting the conditions for reflecting the latest changes in SEC policies during its new leadership.
Regulatory clarity is the key to crypto ETF approvals
In a January interview With blockworks, Bloomberg ETF analysts discussed James Seyffart, the challenges that Solana ETFs face, including Sec’s classification of Solana as security and ongoing moods, which complicates the approval process for a Commodities ETF cover.
According to Seyffart, SEC usually seeks clarity and solution of legal disputes before making a decision on financial products related to assets with uncertain regulatory status.
Although it does not specifically mention XRP, the situation is the same because regulatory clarity is crucial for approval. SEC’s trial against Ripple over XRP’s status as security has been a major obstacle to all XRP ETF archiving. Until Sec’s mood against Ripple is resolved it is unlikely that any XRP ETFs will be approved.
If the SEC’s position on XRP changes, which could potentially lead to reclassification, it would not only affect Ripple’s ongoing legal cases but also increase the likelihood of approving Spot XRP ETF.
