XRP rises to five-month high as some point to Bitcoin commodities mentions
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XRP tokens surged 8% in the past 24 hours to buck a market-wide decline following a US Commodity Futures Trading Commission (CFTC) filing against prominent crypto exchange Binance.
XRP was trading just under 50 cents in Asian morning hours on Tuesday, hitting a five-month high. The XRP Ledger network has seen fundamental upgrades in recent months that may have contributed to the increase.
However, part of the positive outlook came as some in the community said the classification of major tokens as a commodity in the CFTC filing against Binance could mean that XRP tokens were also commodities rather than a value, as alleged by the US Securities and Exchange Commission (SEC) in the ongoing Ripple v. SEC case.
Ripple Chief Technology Officer David Schwartz has previously argued for XRP tokens as a commodity. “XRP is a commodity that trades and one XRP is treated as equal to every other XRP. That’s pretty much the definition of a ‘commodity,'” Schwartz said in a January tweet.
“No part of XRP’s value comes from other people’s legal obligations to XRP holders,” he said at the time.
Ripple has historically kept a distance from its relationship with XRP, the token that powers some of Ripple’s products and the XRP Ledger network. However, any progression in the case causes XRP price movements.
Binance and CEO Changpeng Zhao were sued on Monday as the CFTC alleges that Binance offered unregistered crypto derivative products and instructed US customers to avoid compliance checks through the use of virtual privacy networks (VPNs).
The lawsuit, filed in the US District Court for the Northern District of Illinois on Monday, alleges that Binance operates a derivatives trading business in the US, offering trades for cryptocurrencies including bitcoin (BTC), ether (ETH), litecoin (LTC), tether. (USDT) and Binance USD (BUSD), which the lawsuit referred to as commodities.
Bitcoin fell below $27,000, losing a local support level, while ether briefly fell below $1,700 before recovering. Total market capitalization fell nearly 3%, CoinGecko data shows.
Markets fell almost immediately – but some market observers found optimism in the fact that the tokens mentioned in the CFTC filing were commodities and not securities.
Alarm bells in the wider crypto community were sounded last month when the US Securities and Exchange Commission was rumored to crack down on staking-as-a-service products, or protocols that pay rewards to users who unlock token holdings for a specified amount of time.
