Paul Grewal, Chief Legal Officer of Coinbase, recently noted that he agrees with Attorney John Deaton's stance on what constitutes an investment contract. Grewal claims that, in order to qualify as an investment contract, it must involve an investment and a contract. A secondary sale of a digital asset such as XRP, he claims, does not qualify as it includes neither an investment nor a contract. This opinion has led to calls for Coinbase relisting XRP, as the exchange's stand implies that XRP is not a security, as alleged by the SEC.
However, even if Ripple case is won by SEC, Coinbase will not be immediately relisting XRP. Last month Grewal told The Crypto Basic that even if the SEC case is won by Ripple, Coinbase will need to make certain assessments before re-listing XRP.
To further clarify the matter, Attorney Deaton stated the Securities Act of 1933 does not mention digital assets and the Supreme Court’s explanation of investment contracts did not include digital assets. While digital assets can be marketed and sold as securities, it does not make them inherently securities. He noted XRP and ETH could have been sold as securities at some point, but they are not considered securities by nature.
Jaxon Chavez
- 2023-04-03
Coinbase Executives Assert: XRP is Not a Security
Paul Grewal, Chief Legal Officer of Coinbase, recently noted that XRP does not qualify as an investment contract. However, even if the SEC case on XRP is won by Ripple, Coinbase will not immediately relist XRP. Attorney John Deaton further clarified that while digital assets can be marketed and sold as securities, they are not inherently securities.
