SEC May Classify XRP as a Commodity – A Game-Changer for Ripple and the Crypto Market
XRP’s Status Under the Spotlight: Commodity or Security?
The U.S. Securities and Exchange Commission (SEC) is reportedly considering classifying XRP as a commodity in its settlement negotiations with Ripple Labs. According to FOX correspondent Charles Gasparino, the SEC is using Ethereum as a benchmark to determine XRP’s regulatory status. This potential shift could redefine XRP’s legal standing and market positioning.
Following the news, XRP’s price skyrocketed past $2.34, marking an impressive 23% gain in just seven days. This bullish momentum highlights how XRP continues to defy broader market trends, even as negative sentiment weighs on the crypto space.
XRP ETF Approvals Depend on Regulatory Clarity
Ethereum’s classification as a “pure commodity” is a crucial reference point in the SEC’s deliberations. While Ethereum initially launched via an ICO (Initial Coin Offering), the SEC has since allowed it to trade as a commodity—setting a precedent that XRP could follow.
Bloomberg ETF analyst James Seyffart recently pointed out how regulatory uncertainty affects ETF approvals. He referenced Solana (SOL), which remains classified as a security, making it difficult to launch a Solana ETF. Similarly, XRP has faced regulatory roadblocks, and until its status is fully resolved, the chances of an XRP spot ETF remain slim.
However, if the SEC decides to reclassify XRP, it would significantly impact Ripple’s ongoing legal case and boost the odds of an XRP ETF approval—unlocking massive institutional investment opportunities.
Landmark 2023 Ruling: XRP Was Not Deemed a Security
In July 2023, Judge Analisa Torres ruled that XRP is not a security when traded on secondary markets. The court determined that since retail buyers had no direct relationship with Ripple and were unaware of its involvement, the transactions did not qualify as securities sales.
This ruling was a major victory for Ripple, setting an important legal precedent. However, the ongoing SEC vs. Ripple lawsuit remains a hurdle for full regulatory clarity and broader market adoption.
Settlement Talks Nearing a Conclusion?
According to FOX journalist Eleanor Terrett, the long-running SEC vs. Ripple battle may finally be wrapping up. Insiders suggest that new SEC leadership is re-evaluating its stance on crypto enforcement, raising the question:
If regulatory clarity is the new goal, should Ripple still be penalized for past actions?
Terrett reports that Ripple’s legal team is negotiating changes to the $125 million fine and restrictions on institutional XRP sales. The SEC, now reconsidering its regulatory approach, may be willing to modify the settlement terms accordingly.
What’s Next for XRP?
If the SEC reclassifies XRP as a commodity, it could trigger a major shift in market sentiment. Not only would it validate Ripple’s long-standing argument, but it could also accelerate XRP ETF approvals, attracting institutional investors and potentially sending prices soaring.
As regulatory discussions continue, XRP traders and investors should closely monitor upcoming developments. One thing is certain—the final verdict could reshape the future of XRP and crypto regulation as a whole.
