Crypto Company Ripple Plans to Relocate to the UK from the US due to Regulatory Concerns

Billion-dollar crypto company Ripple on Thursday announced its plan to relocate its headquarters to the UK from the U.S. over regulatory concerns.

The CEO of the San-Francisco-based firm, Brad Garlinghouse said that U.K.’s Financial Conduct Authority, the markets’ watchdog doesn’t regard XRP a security, which has become a key source of contention in the US market. Like the UK, other regions including Switzerland, Japan, Singapore, and the United Arab Emirates have also assured Ripple of the same.

“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 told CNBC. “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 an interview with Fortune Magazine earlier this month, co-founder and executive chairman of Ripple, Chris Larsen gave a peek at the company’s consideration of relocating its headquarters outside of the United States.

The fintech and crypto company has been in a series of legal battles with some investors who accuse Ripple of selling unregistered securities and making misleading XRP statements. The company argues the allegation, suggesting that XRP doesn’t qualify as a security.

Officials at the U.S. Securities and Exchange Commission have clarified that cryptocurrencies like bitcoin and ethereum are not securities, and are not regulated in the same way as stocks and bonds. However, the status of XRP remained in uncertainty.

Ripple is concerned that putting a “security” title on XRP could bring in strict new rules, which could heavily impact the company in the time being. Despite its claims of being an independent cryptocurrency, the company owns 55 billion of the 100 million billion XRP tokens in existence. Ripple also generates revenue from selling some of its XRP holdings every quarter.

The crypto company says it mainly uses the digital asset as a “bridge currency” to run financial services for clients and cash transactions overseas at a cheaper rate. Ripple partners with some of the largest financial institutions in the world including American Express and Santander, but the firms do not currently use XRP for processing transactions.

Rather than use XRP to process transactions, these big banks use a blockchain-based interbank messaging platform. Larsen admitted that banks were neither in a haste to use XRP for cross-border payments. “The biggest banks don’t necessarily see it as a big problem because they already have liquidity everywhere,” he said.

What is XRP?

XRP is the fourth-largest cryptocurrency in the world by market value, according to data compiled by CoinMarketCap.

About Ripple

Ripple is a financial technology firm that provides digital financial services to customers. Its network comprises of institutional payment providers including banks. Through its platform, RippleNet, the form provides seamless ways to send money worldwide. It uses cutting-edge blockchain technology to streamline payment services and helps in cost reduction.