According to the Coinbase Council, XRP has the highest rating out of 28 cryptocurrencies – which means it’s as close to security as you can get: 4 out of 5.
As it was reported, eight major US crypto companies will be represented while their top executives testify before the US House of Representatives Financial Services Committee on December 8.
The hearing was created as part of Congress’ efforts to create a regulatory framework for digital assets where the ecosystem shows no signs of halting its growth in size and importance.
The panel will focus on “The Challenges and Benefits of Financial Innovation” and will welcome Alicia Haas, CFO of Coinbase Global; Jeremy Allaire, CEO of Circle. Sam Bankman-Fried, CEO, FTX Trading; Chad Cascarilla, CEO of Paxos; and Dennelle Dixon, CEO of the Stellar Development Foundation.
Their testimony is likely to be crucial to what lawmakers will think about digital assets, their nature, and how to properly regulate the asset class and businesses within the space without hurting innovation.
Coinbase plays a leading role. It has become the most relevant cryptocurrency exchange in the US and has already gone public, providing guidance to market participants, blockchain companies, financial institutions, legislators, and government officials.
As part of its leadership game, Coinbase established the Crypto Rating Board in 2019, which is joined by Anchorage, Bittrex, Circle, Cumberland DRW, Genesis Trading, Grayscale Investments and Kraken. OKCoin, RADAR, and eToro USA joined later.
The goal of the council was to create a system that rates cryptocurrencies on a scale of 1 to 5 regarding whether or not cryptocurrency is likely to be safe.
“A score of 5 results when an asset appears to have many characteristics that match the Howey test factors. It is more likely, for assets with lower scores, to implicate US securities laws.”
“It results in a score of 1 when an asset appears to have a small number of characteristics matching the Howey test factors. It is perhaps less likely, for assets with higher scores, to implicate US securities laws.”
According to Coinbase, the ratings are not endorsed by any government agency or third party and do not serve as legal advice.
So far, CRC has designated 28 cryptocurrencies, including XRP, the digital assets that feed Ripple’s blockchain network. Of the 28 digital assets reviewed, XRP has the highest rating – meaning that it is closest to a security: 4 of 5.
EOS hasn’t even gotten such a high score. The digital asset developed by block.one has been sued by the Securities and Exchange Commission (SEC) for possessing an unregistered securities offering and the case was settled for $24 million (plus a $27.5 million class action settlement). EOS is rated 3.75 out of 5.
According to the CRC, Ethereum is nothing but a file 2 of 5. Ripple is using former SEC Commissioner Bill Hinman’s 2018 analysis on Ether as evidence of utter confusion among the SEC ranks as the defendants in the SEC’s lawsuit look to win the case based on a brief ruling on the fair notice defense.
A few months ago, attorney Jeremy Hogan presented his analysis of how much security each of the best cryptocurrencies have. On Ethereum, the 2014 presale and centralized management structure were considered an issue. What’s more is the change to staking with Ethereum 2.0.
A recent report by JP Morgan points to Coinbase as a major player in the return of XRP to normality in the US after and if Ripple wins the SEC lawsuit.
JP Morgan’s North American Equity Research has found value in XRP for its unique value in the world of finance with a clear competitive advantage against SWIFT and complementary to stablecoins. Prevalent adoption will be at the end of the tunnel.
“If the company is able to win the SEC lawsuit and resume trading on major crypto exchanges like Coinbase, XRP is poised for massive adoption.”