In this photo illustration of the ripple cryptocurrency ‘altcoin’ sits arranged for a photograph on April 25, 2018 in London, England.
Jack Taylor | Getty Images News | Getty Images
LONDON — Ripple, the $10 billion financial technology company best known for cryptocurrency XRP, is considering relocating its headquarters overseas due to frustration with the U.S. regulatory environment.
The San Francisco-based firm’s CEO Brad Garlinghouse, who says he visited London only last month, told CNBC that U.K. markets watchdog the Financial Conduct Authority doesn’t deem XRP a security — a key source of contention in its home market. Other regions had provided similar assurances, he added.
“What you see in the U.K. is a clear taxonomy, and the U.K.’s FCA took a leadership role in characterizing how we should think about these different assets and their use cases,” Garlinghouse said.
“The outcome of that was clarity that XRP is not a security and is used as a currency. With that clarity, it would be advantageous for Ripple to operate in the U.K.”
In addition to the U.K., Garlinghouse said Switzerland, Singapore, Japan and the United Arab Emirates were also under consideration for Ripple’s potential move abroad.
“The U.S. is out of sync with other G20 markets and how some of them think about these regulations,” he added.
Chris Larsen, a co-founder and executive chairman of Ripple, first flagged the company’s desire to move its global HQ outside the U.S. in an interview with Fortune magazine earlier this month.
Ripple has been locked in a legal battle with some cryptocurrency investors who accuse it of selling unregistered securities and making misleading statements about XRP. The company disputes the allegations, pushing back on the suggestion XRP qualifies as a security.
Meanwhile, officials at the U.S. Securities and Exchange Commission have said cryptocurrencies like bitcoin and ethereum are not securities that should be regulated in the same way as stocks and bonds. The status of XRP has been shrouded in uncertainty.
The “security” label matters because it could bring XRP under strict new rules — and that could heavily impact Ripple. Though it claims to be independent of the cryptocurrency, Ripple owns 55 billion of the total 100 billion XRP tokens in existence. The company even makes revenue from selling some of its XRP holdings each quarter.
XRP is the world’s fourth-largest cryptocurrency by market value, according to data from CoinMarketCap. Ripple says it mainly uses the digital asset as a “bridge currency” for its financial services clients to send money overseas quickly and cheaply.
The company works with some of the world’s largest financial institutions, including Santander and American Express. However, those firms do not currently use XRP for settling transactions.
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