XRP crashed more than 50% last week after a lawsuit against Ripple filed by the US Securities and Exchange Commission (SEC). The world’s fourth-largest cryptocurrency has now found strong support in Japan where cryptocurrency exchanges have refused to delist XRP.
According to a note by Sadakazu Osaki, a researcher at Japan’s biggest economic research firm, Nomura Research Institute, XRP is categorized as a crypto asset under the Funds Settlement Act in Japan. He added that the SEC’s lawsuit against Ripple will have no impact on the status of XRP in Japan because the cryptocurrency does not fall under the category of security in the Asian country.
SBI Holdings, one of the largest financial firms in Japan, supported the explanation outlined by Osaki and added that due to XRP’s treatment as a crypto asset, digital exchanges in the country will continue the trading under local regulations.
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“Although XRP is widely traded by crypto-asset exchanges in Japan, it can be said that under Japanese law, it is established that XRP is a ‘crypto asset’ under the Funds Settlement Act and does not fall under the ‘Securities’ under the Financial Instruments and Exchange Act, which requires the submission of securities notification documents to the Financial Services Agency when recruiting or selling. This will not be affected by the sec’s lawsuit with Ripple,” Osaki added in his research note.
Former SEC Chairman, Jay Clayton made it clear during his term that Bitcoin and Ethereum are not securities. However, he always remained unsure about XRP due to its centralized nature. In his last couple of days at the office, the SEC filed the lawsuit against Ripple Labs and clearly termed XRP as a security. Jay Clayton’s last day at the SEC triggered a $50 billion cryptocurrency sell-off as the cryptocurrency market dropped from $660 billion to $610 billion in less than 24 hours. Japan’s stance on XRP is different from the US, the regulatory authorities clearly mentioned that it is a crypto asset and not a security.