The debate surrounding the security status of XRP has resurfaced following bold comments made by Jason McCabe Calacanis on the All-In Podcast. Calacanis recently argued that XRP is undeniably a centrally controlled security, a claim that has stirred fresh controversy and drives a response from prominent pro-crypto lawyer John Deaton. Deaton, known for his advocacy on behalf of XRP holders in the ongoing Ripple vs. SEC lawsuit, was quick to challenge Calacanis’ views, offering to share his insights and provide a counterpoint to the accusations.

Jason Calacanis’ Controversial Comments

Calacanis, a respected figure in the tech and investment community, made waves with his strong stance on XRP’s status. He emphasized that, in his view, XRP is fundamentally different from decentralized cryptocurrencies like Bitcoin, citing the centralized control of the token. He further argued that if the U.S. Securities and Exchange Commission (SEC) ever approves an XRP ETF, it would set a dangerous precedent, rendering securities law effectively meaningless.

His comments were directed not only at Ripple Labs, the company behind XRP, but also at the broader implications for the cryptocurrency market. According to Calacanis, the approval of an XRP ETF could open the floodgates for major startups and funds to dump significant portions of their XRP holdings onto retail investors, potentially destabilizing the U.S. capital markets and eroding global trust in American financial systems.

Calacanis’ remarks have reignited concerns over the centralization of XRP and its potential classification as a security. His position aligns with longstanding criticisms of XRP’s governance, particularly its reliance on Ripple Labs, which has played a major role in its development, distribution, and market behavior.

John Deaton’s Rebuttal

John Deaton, an influential lawyer in the cryptocurrency space, wasted no time in addressing Calacanis’ statements. Known for his defense of XRP holders in the high-profile Ripple vs. SEC lawsuit, Deaton offered to educate Calacanis on why XRP does not fit the typical definition of a security. He emphasized his deep involvement with XRP and his advocacy on behalf of its community, noting that he has 80% of his net worth invested in Bitcoin and remains a staunch supporter of both Bitcoin and XRP.

Deaton’s response highlights his belief that XRP’s status as a security is not as clear-cut as Calacanis suggests. He pointed out that while XRP’s centralized governance has often been cited as a concern, this does not automatically categorize the token as a security under U.S. law. According to Deaton, XRP’s legal standing is still a subject of active debate, particularly in light of the ongoing litigation between Ripple Labs and the SEC, which is examining whether XRP constitutes a security based on how it is sold and used.

Deaton has been an advocate for XRP holders throughout the legal battle, arguing that the SEC’s actions have unfairly targeted retail investors who hold XRP in good faith. His focus has been on ensuring that any legal decisions surrounding XRP do not set a harmful precedent for other cryptocurrencies, especially those with centralized development teams.

The SEC’s Role and Ripple’s Ongoing Legal Battle

The renewed scrutiny of XRP’s security status comes at a crucial moment in its legal battle with the SEC. The SEC has argued that XRP is a security because it was sold as an investment, with Ripple Labs allegedly profiting from the sale of the token. Ripple, on the other hand, has maintained that XRP is not a security, highlighting its use as a currency and arguing that it operates differently from traditional securities.

The outcome of this case could have major implications not just for Ripple but for the entire cryptocurrency industry. If the SEC prevails in its lawsuit, it could signal a tougher regulatory environment for cryptocurrencies, especially those with centralized teams or significant control over their networks.

On the other hand, if Ripple wins the case, it could set a major precedent in favor of decentralized cryptocurrencies, potentially leading to clearer regulatory guidelines for the industry as a whole.

The Bigger Picture: Centralization vs. Decentralization

The debate over XRP’s centralization touches on broader issues within the cryptocurrency ecosystem. Proponents of decentralized cryptocurrencies, like Bitcoin, argue that any form of centralization undermines the very principles of blockchain technology. For them, decentralization is key to ensuring fairness, security, and resistance to censorship.

However, supporters of XRP argue that its centralized structure is necessary for its use case, especially in facilitating cross-border payments and enabling enterprises to adopt blockchain technology at scale. They contend that XRP’s semi-centralized nature does not inherently make it a security, and its utility in the financial sector is proof of its value beyond speculation.

Conclusion: The Debate Continues

The legal and regulatory status of XRP remains a critical issue for the broader cryptocurrency market. With figures like Calacanis advocating for the token’s classification as a security and Deaton providing a counterpoint, the conversation about XRP’s centralization is far from over. As the legal battle between Ripple and the SEC unfolds, the industry will continue to watch closely, as the outcome will have significant implications for the future of cryptocurrencies, especially those with centralized elements like XRP.

While the debate rages on, one thing is clear: the XRP security issue will remain a key topic in the evolving landscape of crypto regulation and law.