Charles Hoskinson, the founder of Cardano, focuses on the Ripple case of the US Securities and Exchange Commission (SEC) and the agency’s claim that XRP is an unregistered security.
In the AMA video, Hoskinson says part of the problem in regulating crypto assets is that tokens are dynamic and difficult to categorize.
“The problem with cryptocurrencies is that they do everything and nothing. And some days they look like securities, some days they look like commodities, some days they look like currency, and some days they look like something else entirely. In many ways, cryptocurrencies are the stem cells of finance. A stem cell is like a super cell and can basically be a heart cell or a brain cell or the like. ”
Not a security
At this point in XRP’s eight-year history, Hoskinson says he doesn’t believe it was a security, although his situation was different in the early days.
“In my previous statements, I said that I don’t think XRP is a security, and I think its current state, current usage, and level of decentralization the ecosystem has are absolutely correct. Was Ripple a security at some point in its lifetime? I am sure that a fair discussion can be made. “
May be problem in the way it is distributed
Hoskinson says he questions whether the way digital asset is distributed is an issue.
“I believe XRP is not a security, at least in general terms, and I’m going back to this stem cell argument. There’s definitely a securities-like behavior, and it’s deeply confusing to me, for example in the age of smart contracts why a real company would be responsible for the distribution of a token is problematic. Now that doesn’t make any sense. You don’t have to do this when you have an existing, working network. So it alone is problematic, especially if there is discretion among the custodian to spend it. “
Does not create a domino effect
Regardless of the outcome, Hoskinson says he doesn’t believe XRP will have a domino effect on the crypto industry if it eventually declares a security.
“For example, if Ripple falls and XRP burns in flames, I don’t believe that somehow the entire industry will crumble and the whole thing will be a security.”