XRP is not a security, says Ripple
A Ripple representative says the question of legal status never even came up in meetings with Coinbase.
"We absolutely are not a security. We don't meet the standards for what a security is based on the history of court law," Ripple's chief market strategist Cory Johnson told CNBC in an interview.
The quote came amidst discussion of Ripple's listings status on cryptocurrency exchanges, such as Coinbase. According to Johnson, the issue never even came up in Ripple's discussions with Coinbase.
"Coinbase never ever raised the issue of whether or not XRP is a security in our discussions about listing XRP," Johnson said. "We're 100 percent clear, it's not a security. We don't meet the standards."
Coinbase might not think it's 100% clear. In a recent hearing, Coinbase legal head Mike Lempres recently expressed frustration about cryptocurrency's uncertain legal footing. He said that Coinbase wanted to list more tokens but didn't want to inadvertently and illegally become an unlicensed securities dealer. It's possible that Coinbase simply doesn't want to risk taking Ripple's assurance that XRP is not a security at face value.
This is significant because a listing on the Coinbase exchange has typically meant a surge in token price. After hitting an all time high around US$3.50 at market peaks, XRP has struggled to gain altitude. Around the end of 2017 and start of 2018, there were clear signs that Coinbase was considering an XRP listing, but it never eventuated much to the consternation of Ripple enthusiasts.
Sources have previously said that Ripple tried to buy listings on the Coinbase and Gemini exchanges with cash in hand, but those efforts were also unsuccessful.
It's also possible that XRP won't be getting a Coinbase listing, regardless of whether or not it's considered a security. Firstly, the GDAX asset framework, which describes the criteria by which tokens are considered for GDAX listings, gives points for network decentralisation. The Ripple network arguably doesn't meet this criteria, although it's currently making big strides towards decentralisation.
Secondly, there's the simple possibility that Coinbase sees Ripple as a competitor, and has its own plans to move into the cross-border payment industry. Here too, Ripple is making big strides and working to diversify its own offerings to compete in areas other than international payments.
Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VEN, XLM, BTC, XRB