The Binance CEO made his comments via Twitter earlier today. But what made his talk about XRP in the first place?
Well, this was because freelance Journalist Jospeh Young had sent out a tweet that was critical of Coinbase for its negative stance towards XRP:
Coinbase has been listing everything in crypto apart from XRP. It says it may add every asset above a certain level like the stock market but still no XRP. Savage.
On a serious note, it's likely the pending federal court case against Ripple is holding them back for now.
— Joseph Young (@iamjosephyoung) December 12, 2018
Now, it is not clear why Young believes that Coinbase is so anti-XRP since on 7 December 2018 Coinbase announced that XRP was one of the 31 digital assets it was considering adding to Coinbase Pro:
Coinbase is exploring the addition of 30+ new digital assets. It’s our goal to offer support for all assets that meet our standards and are compliant with local law. https://t.co/Hl2zbVodLl
— Coinbase (@coinbase) December 7, 2018
In any case, Young’s tweet prompted CZ to send out this tweet in reply:
The court case may take years. But if XRP is ruled as a security, it would seriously hurt a lot of US users, and to a certain extent, other users around the world too. It certainly doesn't look like a security to me, but that's just one person's opinion.
— CZ Binance (@cz_binance) December 12, 2018
Of course, as most XRP holders know, Ripple is currently involved in a class action lawsuit that is currently set to take place in a federal court, and it is the juidicial system and not the the U.S. Securities and Exchange Commission (SEC) that will probably decide whether or not XRP is a security (even though Ripple’s executive team has explained on numerous occasions why they strong believe that XRP has not been a security at any point during its existence).
Nevertheless, what CZ is saying sounds correct. The problem is that the SEC has been very quiet about the status of all cryptocurrencies with the exception of saying that Bitcoin is not a security, that Ether looks like it is not a security NOW (no comment on whether it may have been in the past), and that most tokens that were sold via Initial Coin Offerings (ICOs) are likely to be securities. And now that there is a class action lawsuit that will be considering the status of XRP, it makes sense for the SEC to wait and see what the court has to say on this subject. And this case could take a long time (when you include appeals) to be ultimately decided.
The problem for U.S.-based crypto exchanges such as Coinbase and Gemini that want to avoid trouble from the SEC is that even if they receive an Alternative Trading System (ATS) license and therefore become allowed to offer securities, those securities must be registered first with the SEC if they are to be offered to all retail investors (and not just accredited investors).
Finally, it is worth remembering that no matter what happens in the U.S., Coinbase may be able to list XRP in other jurisdictions, such as those in Asia, where there seems to be more regulatory clarity around cryptocurrencies.