- UK classifies XRP, BTC and ETH as exchange tokens
- Ripple believes this classification helps in its defence against the SEC
Financial authorities in the UK have clarified their position on what they think the native token of Ripple is. According to a new document published by the Treasury, XRP, alongside crypto assets like Ethereum and Bitcoin are classified as “exchange tokens.”
The report went on to state that these tokens fall under the “unregulated” category and as such it means that they are not e-money or even security tokens.
The new report also referenced a guide that the Financial Conduct Authority (FCA) had published in 2019. According to this document, XRP, BTC and ETH fall outside of digital assets that the financial watchdog can regulate.
FCA had also recently warned consumers about investing in crypto coins. The authority advised people to only invest in these digital assets if they were prepared to lose all of their money.
With the new clarification by the UK Authorities, it means security tokens are recognised to be specified investments, like a share or a debt instrument, as set out by the UK legislation.
UK’s clarification supports XRP claims
When it became imminent that the United States’ Securities and Exchange Commission (SEC) was filing a lawsuit against Ripple alleging that the firm’s native token, XRP, was an unregistered security. However, the crypto firm has vehemently denied this and said that it was going to stand up against the Commision.
The clarification by the UK authorities backs the claim of the San Francisco-based payments company that its token is not a security.
Ripple had severally requested that the authorities in the United States offer some form of clarification for the crypto industry in the country. The crypto firm has even threatened to move its headquarters out of the country due to this lack of clarity.
Until recently, XRP price suffered greatly when news of the lawsuit broke out.