Ripple announced XRP tokens with the vision to revolutionize the international banking system, they intentioned to make a wire transfer a thing of the past. With the four ideas, everywhere, instant, reliable and constant at their core, they were able to get over 200+ institutions to be part of their project. But even after multiple rounds of fundraising, the team has yet to deliver any tangible results. The fundraisers have turned into a fiasco of its own and now the Crypto Rating Council is a financial services firm formed by the biggest crypto exchanges in the US that have given XRP a highly likely security status which could get them into trouble with the SEC.
Scoring process
The CRC rates tokens on the basis of a points-based rating system built upon a set of factual questions that assess each element of the legal test to determine whether an asset is a security. The framework is derived directly from case law and SEC guidance and has been structured to emphasize objective, repeatable, and fact-driven responses that can be answered more consistently across different assets and across the same asset over time. The scoring is between 1 and 5, where 5 means that it is most likely a security while 1 implies its highly unlikely to a security. XRP was given a 4 and this means that in the eyes of the council the token has many characteristics of a security.
Four points
While giving the score the council also looked into the characteristics of the token, and XRP has four in particular that stood out.
Due to regulatory pressure exchanges can only list assets which are securities or assets that are decentralized tokens, this means that Ripple with a score of 4 could, in fact, face eviction from exchanges.
Ripple is in a dire condition with the lawsuit moving forward and its token XRP moving into the category of the worst performer of the year along with Tron. In fact, the XRP token value got to a point of losing 99 percent of its value compared to its peak in 2017, and the team has not been able to produce any good news or plan for the future. Despite its intended use case having great potential, the project has not been able to take off. At one point, JP morgan’s JPM coins even threatened the entire project. In between all of this, CRC’s 4 points rating isn’t going to help the project at all. Ripple has yet to comment or act on the matter. Ripple needs a new direction and a lot of energy to get out of the hole it has dug itself into. The earlier it finds that, the better.
Follow us on Twitter, Facebook, Steemit, and join our Telegram channel for the latest blockchain and cryptocurrency news
