Angel Investor Claims XRP Is A 'Centrally Managed Security'

In a recent post on X, well-known angel investor Jason McCabe Calacanis, who has invested in more than 300 startups including Uber and Robinhood, labeled XRP as “a centrally controlled security.” This claim has sparked an immediate backlash from the cryptocurrency community, underscoring ongoing tensions regarding the classification of XRP.

Calacanis, the founder and CEO of LAUNCH, which includes the Launch Accelerator and Angel University, made his remarks in response to a January 9 post by Polymarket that reported Ripple CEO Brad Garlinghouse’s recent dinner with former U.S. President Donald Trump. The same post mentioned optimistic projections for a potential spot exchange-traded fund (ETF) this year, estimating the chances at 70%.

Based on conversations with early crypto enthusiasts, Calacanis expressed his concerns about the authenticity of XRP as a decentralized asset and the potential impacts of a favorable regulatory position. He questioned whether there was any doubt about XRP’s classification as a centrally controlled security, stating, “XRP is a centrally controlled security — is that even a question for anyone here?”

He elaborated, referencing insights from experienced crypto investors: “Every crypto OG I talk to says it’s the opposite of Bitcoin. If the SEC permits it to trade like Bitcoin, it would render securities law meaningless. This could unleash chaos in the markets, with countless startups, funds, and opportunists dumping half of their tokens on retail investors while they slowly liquidate the other half they hold and manage.”

Calacanis further championed the idea of limiting trading to accredited or “sophisticated” investors, arguing such measures would at least provide a safeguard for those aware of the inherent risks involved. He stated, “That kind of chaos is NOT a good idea for America, as global investors trust in our stable and controlled markets and are willing to entrust their capital to us.”

He proposed that if there were a rigorous test for sophisticated investors and XRP could only be traded by individuals who passed such a test, it would ensure that those participants understand the significant risks of investing in potentially volatile projects.

Community Response to Calacanis’ Remarks

The XRP community promptly voiced their displeasure with Calacanis’ assertions, contesting his interpretation of the digital asset and highlighting the operational structure of the network. A user by the name of Vet (@Vet_X0), who identifies as a dUNL validator, argued that XRP shares similarities with Bitcoin as it is “a neutral, counterparty-free” asset.

He explained, “XRP and Bitcoin operate similarly as neutral, counterparty-free assets on a decentralized, open-source codebase. The fundamental difference lies in their methods for generating new blocks, with the Ledger employing a consensus protocol while Bitcoin utilizes mining. Currently, there are nearly 1,000 nodes and hundreds of validators actively supporting the XRPL.”

Another user on X, brandon (@BlueFoxAlaska), reminded Calacanis that judicial decisions have already clarified the classification of XRP: “There have been court rulings, Jason. Very clear. Court rulings. XRP is not a security. At this point, your awareness of these facts is evident, yet you still choose to antagonize. Is there some personal issue with you and Brad Garlinghouse?… What’s the tea?”

Calacanis’ comments have reignited the ongoing debate over XRP’s regulatory status, emphasizing how it may diverge from decentralized principles. Although a U.S. court ruling in the ongoing Ripple case has indicated that XRP should not be categorized as a security, there are still significant discrepancies, particularly among the Bitcoin “maximalist” faction within the crypto sphere.

The Implications for Cryptocurrency Regulation

The discourse surrounding XRP raises critical questions about the future of cryptocurrency regulation in the United States and globally. The digital asset space is fraught with ambiguity, and ongoing debates highlight a crucial intersection between innovation and regulation. Investors are keenly observing how these discussions might shape the larger landscape of cryptocurrency regulations going forward.

Furthermore, as traditional financial systems increasingly integrate with blockchain technologies, the clarity of regulations surrounding digital currencies like XRP becomes essential for fostering trust and driving institutional adoption. Regulatory clarity would help mitigate risks associated with the volatility commonly attributed to the crypto market and could potentially foster a more welcoming environment for innovation.

Recent court rulings, including those regarding Ripple, serve as pointers that may guide future regulatory frameworks. Stakeholders are carefully analyzing the outcomes to understand the implications such rulings could have on the broader crypto ecosystem. The discussions that are arising from Calacanis’ comments are indicative of a growing need for deeper engagement among regulators, investors, and the cryptocurrency community.

Moreover, the role of decentralized finance (DeFi) protocols and their relationship with existing financial regulations continues to be a topic of keen interest. Balancing innovation with investor protection will require collaborative efforts from all parties. Discussions surrounding XRP can be seen as microcosms of these larger conversations taking place within the crypto sphere.

Ultimately, as the cryptocurrency market matures, the call for structured and transparent regulatory frameworks will intensify. The ongoing conversations, both supportive and critical of XRP, will likely influence legislation concerning digital currencies as regulators strive to adapt to the ever-evolving landscape of finance.