Is XRP a security or a commodity? Justin Bons, Founder & CIO of Cyber Capital, has shed light on this, accusing the Ripple Foundation of having complete control over the XRP network. He claims the network is centralized and permission, sparking heated debates within the crypto community.
Bons provides a detailed thread on Twitter, arguing that the consensus mechanism underlying XRP – Unique Node Lists (UNLs) – reveals centralization at its core. He claims that UNLs are controlled by centralized parties, including the foundation itself.
Bill Morgan Defends XRP
But wait, digital asset enthusiast and lawyer Bill Morgan defend XRP, stating that the fate of Ripple in its ongoing battle with the SEC doesn’t rest on the network’s decentralization but on the Howey test that determines whether a financial instrument is a security or not. The role of decentralization in the Howey Test still remains a mystery. This is where regulatory clarity is required.
Proof of Stake – A Savior or Achilles Heel?
Bons suggested that switching to a PoS consensus mechanism can be the solution to XRP’s alleged centralization. However, Morgan counters that SEC Chairman Gary Gensler sees staking and rewards as red flags for securities, which could bring trouble for Ethereum’s future after its transition to PoS. Moreover, the SEC has not provided clarity on Ethereum’s security status following its planned transition to PoS. So, is PoS a savior or Achilles Heel?
The Fate of XRP
The saga of Ripple, XRP’s decentralization, and the SEC lawsuit continues to unfold, with the crypto world watching intently.
Will the Ripple Foundation successfully prove its innocence, or will XRP be deemed a security?
And what does this mean for the broader cryptocurrency landscape? Only time will tell!
Source: https://coinpedia.org/ripple/ripple-live-news-is-xrp-a-security-or-commodity-experts-debate/