Widely followed crypto commentator Vincent Scott has dismissed claims that investors may need a limited liability company (LLC) to hold XRP due to tax implications.
In a recent video, Scott stated plainly, “You do not need an LLC to hold XRP, and that’s false.”
He noted that confusion often stems from questions about potential tax implications. However, he insisted that forming an LLC is not necessary for simply owning digital assets like XRP.
Recall that industry leaders like Jake Claver continuously advise XRP investors to set up tailored legal, tax, and security structures such as trusts, LLCs, and crypto-specific custody solutions to protect their wealth.
Meanwhile, commentators like Scott do not buy that idea.
Tax Implications Depend on State Laws
Scott pointed to state-specific regulations as the real factor to watch. “Check your state,” he said. He highlighted Missouri as an example, noting it has zero capital gains tax on crypto.
He encouraged crypto holders to become politically active in their states or relocate if they want to benefit from favorable tax conditions. According to Scott, no legal entity, such as an LLC, can shield investors from federal oversight.
“It doesn’t matter what umbrella you throw over it, they’re gonna take it,” he warned, referencing historical events like the 1933 Gold Confiscation Act.
For context, in April 1933, President Franklin D. Roosevelt issued an Executive Order requiring U.S. citizens to turn in most of their gold coins, bullion, and certificates to the federal government in exchange for paper currency, under threat of fines or imprisonment.
The goal was to combat the Great Depression by removing gold hoarding, increasing the money supply, and giving the government more control over monetary policy.
Call for Political Engagement
Scott stressed that the only real safeguard for crypto investors is a politically active citizenry. He urged viewers to campaign, vote, and support leaders who advocate for clear crypto regulations. “We’re in this gray area right now because laws aren’t passed,” he said.
Notably, there are ongoing efforts to establish clear crypto regulations in the United States. The CLARITY Act, currently under review, aims to define regulatory oversight by assigning roles to the SEC and CFTC.
Meanwhile, the GENIUS Act, already passed, creates a federal framework for stablecoin issuance. The Anti-CBDC Act seeks to prevent the Federal Reserve from launching a central bank digital currency without congressional approval.
Clear Rules Needed for Ripple’s Technology to Thrive
Notably, Scott also emphasized that there is a need for clear laws so that approved institutions can use Ripple’s technology to move money. He said Ripple’s full potential will only be realized once proper regulations are in place.
“That’s the goal we keep talking about,” he added, pointing to Ripple’s ongoing work, such as acquiring companies and obtaining licenses to boost the use of XRP.
XRP Holders: Focus on Smart Storage Choices
While reiterating that forming an LLC offers no special protection, Scott advised investors to focus instead on secure crypto storage. He mentioned using Xaman, an XRPL-based wallet, as his personal choice. Notably, he clarified that his recommendation was based purely on logic, not sponsorship.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
