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Ripple notches win in SEC case over XRP cryptocurrency

reuters.com

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Re: Ripple notches win in SEC case over XRP cryptocurrency

#51

Post by JeremyNT »

WinstonSmith84 wrote: post #3

"partial" win!? It's hard to see what would be a "win" otherwise... It's going to have also larger implications - the SEC somehow manages to lose that one, it was hard to imagine or predict. If not even XRP is a security, there is truly no other coins which could be a security. Hate it or love it, but the SEC is simply going to lose all their other lawsuits EDIT: oh funny ... Reuters edited their title and removed "p…

> "partial" win!? It's hard to see what would be a "win" otherwise... It's going to have also larger implications - the SEC somehow manages to lose that one, it was hard to imagine or predict. If not even XRP is a security, there is truly no other coins which could be a security.

This is explained in the article. It was good day for this crypto scam, but it wasn't all good news for them:

> The ruling was also a partial victory for the SEC. The judge held that Ripple violated federal securities law by selling XRP directly to sophisticated investors, and that a trial should be held over its executives' role in those sales.

Also:

> Hate it or love it, but the SEC is simply going to lose all their other lawsuits

Quite a bold statement there, based on a single ruling...

Re: Ripple notches win in SEC case over XRP cryptocurrency

#52

Post by [deleted] »

eric_cc wrote: post #47
petesergeant wrote: post #41

Earlier quoted context omitted.

> If not even XRP is a security Forgive me, I know little about crypto, and am bearish on it, but: My understanding is that Ripple was very much meant to be a currency/commodity, unambiguously, where most other crypto backed by whitepapers were meant to be securities on the basis that they were meant to back some hare-brained scheme or have some utility beyond simply being a means of transfer. If I'm right about that…

> Forgive me, I know little about crypto, and am bearish on it Forgive me, how can you form a bearish opinion on something you know very little about?

[deleted]

Re: Ripple notches win in SEC case over XRP cryptocurrency

#53

Post by detroitcoder »

amluto wrote: post #13

This is IMO rather odd logic. I skimmed the opinion. If identical logic were applied to ordinary stock shares, it seems like it’s saying that shares in a C corp are securities if the C corp sells them to institutional investors, but that if the C corp sells the same shares by putting limit orders on a stock exchange (NASDAQ, for example) and Reddit-reading meme stock buyers buy them, then somehow the C corp didn’t ac…

I had a similar thought at first but then read the actual ruling and it made more sense and it all stems on the 3rd prong of the Howie Test. It states there needs to be a "reasonable expectation of profits derived from the managerial efforts of others" which a share of stock has via dividends, etc. regardless how it was acquired.

For XRP, there is no explicit rights to profits via the efforts of others via the instrument so you then have to look at the agreement made via the contract between the purchaser and the issuer.

On page 18 of the ruling it outlines this for Institutional Investors:

'''The third prong of Howey examines whether the economic reality surrounding Ripple’s Institutional Sales led the Institutional Buyers to have “a reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others.”... Based on the totality of circumstances, the Court finds that reasonable investors, situated in the position of the Institutional Buyers, would have purchased XRP with the expectation that they would derive profits from Ripple’s efforts. '''

However for "Programmatic Buyers" on exchange the ruling said:

'''Having considered the economic reality of the Programmatic Sales, the Court concludes that the undisputed record does not establish the third Howey prong. Whereas the Institutional Buyers reasonably expected that Ripple would use the capital it received from its sales to improve the XRP ecosystem and thereby increase the price of XRP, Programmatic Buyers could not reasonably expect the same.'''

So because there is both no expectation of profits tied to the managerial efforts of others, nor from the contract made by a buyer on exchange, the court ruled the 3rd prong does not apply. Stocks fail the first part of this.

Re: Ripple notches win in SEC case over XRP cryptocurrency

#54

Post by choppaface »

WinstonSmith84 wrote: post #3

"partial" win!? It's hard to see what would be a "win" otherwise... It's going to have also larger implications - the SEC somehow manages to lose that one, it was hard to imagine or predict. If not even XRP is a security, there is truly no other coins which could be a security. Hate it or love it, but the SEC is simply going to lose all their other lawsuits EDIT: oh funny ... Reuters edited their title and removed "p…

> Torres found the company's $728.9 million of XRP sales to hedge funds and other sophisticated buyers amounted to unregistered sales of securities

It would probably have been a bigger win for Ripple had they gotten out of that one.

Re: Ripple notches win in SEC case over XRP cryptocurrency

#55

Post by choppaface »

glerk wrote: post #50

Great day for crypto and for financial freedom in general. Great to see the justice system finally rebuking these unelected bureaucrats and placing some limits on the power they claim to have.

Ripple still faces over $700m of unregistered security sales as part of the decision.

Re: Ripple notches win in SEC case over XRP cryptocurrency

#56

Post by wonderwonder »

choppaface wrote: post #55
glerk wrote: post #50

Great day for crypto and for financial freedom in general. Great to see the justice system finally rebuking these unelected bureaucrats and placing some limits on the power they claim to have.

Ripple still faces over $700m of unregistered security sales as part of the decision.

That's really not a lot of money for them to lose. This is a massive win for them and alt coins in general.

Re: Ripple notches win in SEC case over XRP cryptocurrency

#57

Post by LikesPwsh »

eric_cc wrote: post #47
petesergeant wrote: post #41

Earlier quoted context omitted.

> If not even XRP is a security Forgive me, I know little about crypto, and am bearish on it, but: My understanding is that Ripple was very much meant to be a currency/commodity, unambiguously, where most other crypto backed by whitepapers were meant to be securities on the basis that they were meant to back some hare-brained scheme or have some utility beyond simply being a means of transfer. If I'm right about that…

> Forgive me, I know little about crypto, and am bearish on it Forgive me, how can you form a bearish opinion on something you know very little about?

It's not possible to sustain a magic money box where everyone can put money in and get more out.

Many people get that far in their thinking, realise cryptocurrency is a bad investment, and leave it there.

Re: Ripple notches win in SEC case over XRP cryptocurrency

#58

Post by yata69420 »

DennisP wrote: post #39
modeless wrote: post #6

> But Torres ruled Ripple's XRP sales on public cryptocurrency exchanges were not offers of securities under the law, because purchasers did not have a reasonable expectation of profit tied to Ripple's efforts. > Those sales were "blind bid/ask transactions," she said, where the buyers "could not have known if their payments of money went to Ripple, or any other seller of XRP." I bet this gets overturned on appeal. I…

The judge referenced the Howey case, saying that just because you have an investment contract involving an orange grove, that doesn't mean the orange grove itself is a security. A security is a contract, not just anything that people trade around in a speculative way. William Hinman of the SEC said much the same thing in 2018: https://www.sec.gov/news/speech/speech-hinman-061418

This is pretty obviously the reasonable take.

> A security is a contract, not just anything that people trade around in a speculative way.

The scary thing IMO is that I think if you had enough big money trading bottlecaps or baseball cards, you'd quickly find them being considered a security.

But words have to mean something. Things can't just be a "security" because they make the government feel insecure.

Re: Ripple notches win in SEC case over XRP cryptocurrency

#60

Post by wonderwonder »

LikesPwsh wrote: post #57
eric_cc wrote: post #47

Earlier quoted context omitted.

> Forgive me, I know little about crypto, and am bearish on it Forgive me, how can you form a bearish opinion on something you know very little about?

It's not possible to sustain a magic money box where everyone can put money in and get more out. Many people get that far in their thinking, realise cryptocurrency is a bad investment, and leave it there.

The S&P 500 would argue otherwise
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