In the midst of a market-wide decline prompted by the U.S. Commodity Futures Trading Commission’s (CFTC) filing against crypto exchange Binance, XRP tokens have surged 5% in the past 24 hours and 24% in the past week, reaching a five-month high of approximately $0.4846 at the time of writing. This bullish trend may be attributed in part to recent fundamental upgrades on the XRP Ledger network.
However, some crypto community members have also suggested that XRP tokens could be considered commodities rather than securities, as alleged by the U.S. Securities and Exchange Commission (SEC) in the ongoing Ripple v. SEC case. This is due to the classification of major tokens as commodities in the CFTC’s filing against Binance. As a result, XRP tokens could see increased interest from investors seeking commodity exposure in the crypto market.
Cryptocurrencies as Commodities
In January, Ripple CTO David Schwartz took to Twitter to argue that XRP tokens should be considered a commodity. According to Schwartz, XRP is a raw good that is traded in commerce, and each XRP token is equivalent to every other token. He emphasized that no part of XRP’s value comes from legal obligations to XRP holders.
Despite its association with XRP, Ripple has historically tried to distance itself from the token and its market movements. However, any developments in the ongoing Ripple v. SEC case can impact XRP’s price. The ongoing Ripple v. SEC case has significant implications for the crypto industry, as it could set a precedent for how other tokens are regulated. XRP’s price movements have been closely tied to the case, as any developments can impact investor sentiment.
On Monday, the CFTC filed a lawsuit against Binance and its CEO, Changpeng Zhao. The CFTC stated that Binance provided unregistered crypto derivatives products and directed consumers in the United States to use virtual private networks (VPNs) in order to circumvent compliance requirements.
The lawsuit was submitted on Monday to the United States District Court for the Northern District of Illinois. It asserted that Binance ran a derivatives trading operation in the United States, offering trades for cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Tether (USDT), and Binance USD (BUSD). The lawsuit referred to these cryptocurrencies as commodities.
Bitcoin’s price dipped below $27,000, causing it to lose a local support level, while Ethereum briefly fell below $1,700 before recovering its ground. According to data provided by CoinMarketCap, the whole market capitalization experienced a decline of approximately 2.2%.