It has been more than a decade since Bitcoin set the stage for the popularization of new of cryptocurrencies and blockchain technologies. But as fortunes have been made and lost over and over again—Bitcoin just hit new record levels after Elon Musk announced that Tesla had invested $1.5 billion in the cryptocurrency and would soon accept it for payment—the slow grinding gears of bureaucracy are catching up with the promises of the blockchain technology. In January, only a week shy of the 12-year anniversary of the first Bitcoin transaction, both shareholders and the Securities and Exchange Commission sued Ripple, a blockchain-based remittance company and creator of the XRP (not an initialism) cryptocurrency. With a new administration that seems far more interested in investigating and being involved in the development of the cryptocurrency sphere, it seems as though bureaucracy will at last prove cryptocurrencies cannot live up to the starry-eyed promises.
The SEC’s filing alleges that the XRP is a security, rather than a currency—or whatever else cryptocurrencies claim to be. Thus, it must be subject to the regulations and rules that go with securities. The claim is that Ripple has been issuing XRP coins raise funds to operate its company.
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