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XRP Executives Praise UK as a Crypto Hub, so Why isn’t Ripple Leaving the U.S?

Published July 4, 2023 2:35 PM
Omar Elorfaly
Published July 4, 2023 2:35 PM

Key Takeaways

  • Ripple execs highlight UK’s crypto regulatory advantage over the US
  • XRP and creator Ripple have been in a deadlock with regulators for years
  • What would it take for Ripple to move overseas?

Ripple has been in a legal fight with the US Securities and Exchange Commission for almost three years now. The US-based exchange first faced a lawsuit filed by the regulating body in 2020, alleging that the exchange made millions of dollars trading XRP, which the SEC sees as an “unregistered security.”

Ripple’s legal challenge is among many created by the SEC. The commission has since filed lawsuits against several exchanges, including Binance and Coinbase, citing similar, if not identical, reasons.

Throughout the back-and-forth between the exchange and the regulatory commission, Ripple requested the release of the Hinman documents, a series of messages that accompanied a speech given by a former SEC director, in hopes of providing some clarity on the SEC’s stance on digital assets. But, it seemingly was all in vain.

In the meanwhile, digital-asset regulating bodies overseas have been working on creating clear frameworks regarding the trade of digital assets. Among these countries is the UK, where the government just signed a bill to help create a clear set of regulating guidelines.

Ripple/XRP execs themselves took to Twitter to praise the UK for taking the step forward. This raises the question: If Ripple is struggling in the US, why not move to a different market?

A Crypto-Friendly Government

On Thursday, the UK government put out a press release  announcing the signing of the Financial Services and Markets Bill. 

“The Financial Services and Markets Act 2023 is central to delivering the Government’s vision to grow the economy and create an open, sustainable, and technologically advanced financial services sector.”

A draft  of the bill includes a series of statements that clarify the government’s understanding of the digital asset trade, and how the regulations will be put forth. Among the many clauses mentioned are the following:

““cryptoasset” means any cryptographically secured digital representation of value or contractual rights that—

(a) can be transferred, stored or traded electronically, and

(b) that uses technology supporting the recording or storage of data

(which may include distributed ledger technology).”

UK Director of the Number 10 Policy Unit MP Andrew Griffith even took to Twitter to announce his support for the bill.

Ripple’s US-bound Stockholm Syndrome?

Here’s the thing, Ripple executives also took to Twitter to praise the UK government for taking steps to create clear crypto regulations. Andrew Whitworth, Ripple’s Policy Director, tweeted, “The UK is making good on its promises to position the country as a leading crypto hub.”

To which Susan Friedman, another Ripple Policy exec, responded, “it’s the UK that is leaving the US behind in key areas. The Financial Services & Markets Act being written into law marks a defining moment for #crypto regulation globally.”

With the company’s CEO Brad Garlinghouse constantly talking about “Crypto Exodus” from the US, one must wonder what Ripple is still doing in the US market. Why hasn’t the exchange found its salvation in more stable markets, such as the UK market?

Said Crypto Exodus is actually true for some companies. Take Andreessen Horowitz for example. The Silicon Valley venture capital firm has already announced the opening of its first overseas office, ironically, in the UK.

A Bleak Future For Altcoins

XRP hasn’t really been doing well since the start of the lawsuit. The altcoin is now priced at less than 50% of its price at the time when the lawsuit was filed. 

On top of that, the SEC has since been on a crusade against any altcoins besides Bitcoin Cash, Ethereum, and LiteCoin. The commission’s attack on altcoins it sees as “unregistered securities” has not only caused several exchanges to stop trading in them but also led to a future being built upon Bitcoin and the few altcoins mentioned above.

In the past few months, companies have been rushing to invest in Bitcoin, including some of the world’s biggest firms, BlackRock, Fidelity, and Charles Schwab.

Altcoins such as ADA, SOL, and MATIC are practically getting erased from the US market, being suspended on all major exchange platforms. The suspension hasn’t just halted their trade in the US but also caused their respective values to suffer greatly.

With all these factors in mind, one continues to wonder why Ripple holds on to a market that is evolving so rapidly against the company’s tides.