XRP News – Has the SEC Classified XRP as a Commodity? Regulatory Uncertainty Sparks Debate

The SEC’s move has sparked debate about whether XRP, like Bitcoin and Ethereum, is now considered a commodity. However, the agency has not provided an explicit classification, leaving room for uncertainty.

Crypto journalist Eleanor Terrett pointed out in a recent social media post that the SEC’s acknowledgment of XRP ETFs suggests issuers view the token as a commodity within a securities framework. “They have acknowledged that issuers are applying for a product that classifies XRP as a commodity asset within a securities wrapper,” she noted. Still, regulatory authorities have yet to provide definitive confirmation.

XRP’s regulatory status has been under scrutiny due to Ripple Labs’ ongoing legal battle with the SEC. The lawsuit, filed in 2020, revolves around whether XRP is a security. In a landmark ruling, a U.S. court determined that XRP is not a security in secondary market transactions, a decision that was seen as a win for the crypto industry. However, the court also ruled that Ripple’s direct institutional sales of XRP constituted unregistered securities offerings, leaving a gray area in its overall classification.

The SEC has acknowledged XRP ETF filings, classifying it as a commodity within a securities wrapper, like BTC and ETH, while considering similar products for SOL, DOGE, and ADA. Source: Eleanor Terrett via X

The SEC has since paused additional litigation against Ripple as its crypto task force reassesses regulatory frameworks. Legal experts believe an appeal remains possible, and the case could eventually be reviewed by the U.S. Supreme Court if differing court rulings emerge.

Following the SEC’s green light for XRP-tied ETFs, trading activity surged. Trading volume rose by 30% within the first hour, with a sudden spike in active addresses that were engaging with the XRP Ledger. Exchanges such as Binance and Coinbase experienced high trading, an indication of the high investor demand. The price of XRP also surged to $2.84 on February 15, a 22% increase in five consecutive trading days.

Ripple CEO Brad Garlinghouse called the SEC’s acknowledgment of an XRP ETF “inevitable” despite opposing claims. Source: Eleanor Terrett via X

Experts claim that if XRP crosses the $2.80 resistance, it could go to the psychological price of $3.00 or higher. They caution that pressure from sellers could cause the price to trade between $2.60 and $2.80. Some put estimates that if a break to the upside occurs, XRP will probe new all-time highs of $15 to $17 in the longer term.

The SEC’s treatment of XRP may also influence broader regulatory cases against major crypto exchanges, including Binance and Coinbase. Both websites have been under investigation for the sale of unregistered securities, and their court battles have been temporarily stayed by the SEC’s crypto enforcement task force. If XRP is ultimately a commodity, it could be a bellwether for how analogous digital assets would be treated.

Hester Pierce says XRP is not a security. Source: Collin Brown via X

Market observers believe that the official commodity status for XRP would have a significant impact on its adoption and price trajectory. Some speculate that such a classification could pave the way for institutional investment and push XRP’s valuation beyond $110 in the long term.

The recent shift of the SEC stance against crypto regulation has fueled rumors that the agency will abandon its court case against Ripple. The SEC only recently greenlit 19b-4 filings of XRP spot ETFs by Grayscale and 21Shares, viewed by some as softening stance on the digital asset. Furthermore, leadership changes in drama at the SEC, like the commission’s naming of Mark Uyeda as acting chair and Hester Peirce as head of the new Crypto Task Force, can inform regulatory priorities.

Legal professionals show that if the SEC withdraws its appeal in the Ripple matter, XRP can experience a sudden price surge, likely reaching more than its previous all-time high of $3.55 and moving towards $4.00. Alternatively, if the SEC presses on with the appeal, XRP can experience downward pressure, likely falling to $1.50.

XRP’s future remains closely tied to regulatory developments and investor sentiment surrounding ETF approvals. The next major milestone will be the SEC’s final decision on XRP ETFs, which could determine whether the agency officially recognizes the asset as a commodity.

Ripple (XRP) was trading at around $2.737, down 0.39% in the last 24 hours at press time. Source: XRPLX via Brave New Coin

While the regulatory landscape remains uncertain, analysts advise investors to monitor legal proceedings and SEC announcements closely. Broader macroeconomic factors, including Federal Reserve policies and global crypto adoption, will also play a role in shaping XRP’s long-term trajectory.

For now, the crypto community remains on edge, awaiting the SEC’s next move—and hoping for long-awaited regulatory clarity on XRP’s classification. If you are wondering what crypto buy now, you might have to wait longer for XRP certainty.