The Japan Financial Services Agency (FSA) treats XRP as a cryptocurrency, not a security. The regulator first outlined the legal status of the token in a letter to The Block.
“The FSA regards XRP as a cryptocurrency based on the definitions of the Japan Payment Services Law,” the FSA quoted the publication as saying.
Under the law, a digital asset is a “cryptocurrency” or “virtual currency” when it is used as a means of payment and is not denominated in fiat.
Last month, the Nomura Research Institute wrote in a report that XRP is a crypto asset, not a security. In December, Japanese financial giant SBI Holdings backed the researchers’ stance.
The UK Treasury also does not consider XRP to be a security.
“Exchange-traded tokens such as Bitcoin, ETH and XRP are not subject to regulation,” the UK agency said in a January statement.
On December 23, the US Securities and Exchange Commission filed a lawsuit against Ripple. According to the department, the company sold unregistered securities in the form of tokens.
The CEO of the California-based blockchain company, Brad Garlinghouse, denied the accusations and promised to defend Ripple in court. Preliminary hearings will take place on February 22, 2021.
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