The blockchain start-up Ripple’s cryptocurrency is not a security, one of its top executives told CNBC on Wednesday, seeking to put to rest speculation that it has not been added to popular exchange Coinbase because of questions over its status.
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“We absolutely are not a security. We don’t meet the standards for what a security is based on the history of court law,” Ripple’s chief market strategist, Cory Johnson, told CNBC in an interview.
The statement comes amid debate over whether U.S. securities laws apply to cryptocurrencies. The U.S. Securities and Exchange Commission has indicated the laws apply generally to them, and it has also issued dozens of subpoenas and requests for information on sales of new digital coins.
Bitcoin and ethereum, the largest cryptocurrencies by market capitalization, are generally not considered securities. Right now, Coinbase only lists four coins: bitcoin, its offshoot bitcoin cash, ethereum and litecoin. It had more than 13 million users at the end of November, and traders have speculated that the addition of a new coin to Coinbase would likely bring in more buyers.
U.S. officials have also warned exchanges not to list unregistered tokens, which Bloomberg cited last week as a possible sticking point to ripple’s addition to popular U.S. exchange Coinbase.
San Francisco-based Ripple is developing a payments network for financial institutions. XRP, often called ripple, is the name of the coin participants can use for transactions. Ripple owns about 60 billion of the 100 billion XRP tokens ever created.
Ripple was in talks to add its cryptocurrency to Coinbase, according to Johnson. He says the issue of XRP’s status with regulators never came up.
“Coinbase never ever raised the issue of whether or not XRP is a security in our discussions about listing XRP,” Johnson said. “We’re 100 percent clear, it’s not a security. We don’t meet the standards.”
A spokesperson for Coinbase also confirmed that it did not discuss regulation with Ripple, and their conversations revolved around criteria for adding assets broadly, which the company updated in March, Coinbase said.
Coinbase spokespeople declined to comment on other details of their Ripple discussions.
Ripple’s cryptocurrency, which hit a record high of $3.84 in January, has pulled back significantly to around 56 cents as of Thursday, according to CoinMarketCap.com.