When the US securities regulator is dragging Ripple to court over allegations of selling unregistered securities, its Japanese counterpart recently has an opposite view.
According to a report by The Block, Japan’s Financial Services Agency (FSA) has confirmed that it continues to see XRP as a cryptocurrency, and not as a security.
“FSA regards XRP as a cryptocurrency based on definitions of the Payment Services Act,” the top securities market regulator told the publication. “FSA refrains from making comments about other authorities’ response.”
Once hailed as a disruptor of the existing cross-border payments system, Ripple’s troubles started last month when the US Securities and Exchange Commission (SEC) sued the company for raising $1.3 billion by selling XRP, which allegedly falls under the category of security.
Though Ripple was facing criticism before, the regulator’s lawsuit turned to be an existential crisis for it. The cryptocurrency market reacted to it, and the XRP prices nosedived, shedding around 35 percent from the pre-lawsuit levels.
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Cryptocurrency exchanges, primarily the ones operating in the United States, suspended XRP trading over concerns of regulatory backlash for listing unregistered security. Many other crypto companies also parted from offering services with XRP. Most recently, Grayscale terminated its XRP trust.
Japan Is with Ripple
However, Japan was always supportive of XRP, even after the US’s retaliation. Earlier, multiple Japanese cryptocurrency exchanges refused to delist XRP, saying it is not a security.
The East Asian country is one of the most liberal towards crypto and was among the first to recognize ‘virtual currencies’ as a mode of payment. Japan’s support towards XRP is not surprising, given the many major financial service companies’ ties with the American company.
The UK’s Finance Minister also clarified the country’s stance towards now-controversial XRP, saying it is not a security. He labeled it as an ‘exchange token’ similar to Bitcoin and Ethereum.