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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

#21

Post by Psyonic »

WinstonSmith84 wrote: post #10
otoburb wrote: post #4

Earlier quoted context omitted.

>> [...] what changes should we expect to see in the short term? The article mentions that since the company definitively sold unregistered securities to hedge funds and sophisticated buyers (without registering with the SEC), a jury will now/soon need to "decide whether or not Garlinghouse or Larson aided in the company's violation of the law." Seems pretty clear cut that the company, and it's executives, will have…

> This could become much bigger if the SEC uses this enforcement as an example reference case for future actions against other token projects that followed a similar playbook over the past several years There is no other project, not even a close one, who sold tokens worth almost $1b rewarding their execs, while offering no value whatsoever. This is not a win for the SEC, this is the case they truly couldn't lose. Ye…

Didn't EOS sell $4B worth? https://decrypt.co/80144/4-4-billion-eos-token-raise-fueled-...

Re: Ripple notches win in SEC case over XRP cryptocurrency

#23

Post by dcolkitt »

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…

The holder of a stock certificate has a formal legal contractual relationship with the corporation that issued the stock. The holder of a token does not have a contractual relationship with the entity that issued the token.

Now there's probably some silliness in the fact that if Alice creates a token and sells it to Bob, it's an investment contract, but if Alice creates a token sells it to Mark the middleman who then sells it to Bob it's not an investment contract and therefore not covered by the SEC. But this really comes down to how Federalist society wing of judges have changed Constitutional law.

Up until about 20 years ago, if Congress passed a law that wasn't very well defined or left a loophole open, courts were generally willing to consider the original intent of the lawmakers and interpret the law relative in a commonsense way even if it went against the specific language used by Congress. Federalist Society judges would argue that courts should generally only apply the law as it's actually written (i.e. an investment contract requires an actual legal contract). The argument is that Congress is around and still exists and perfectly free and able to update the existing laws if they're unhappy with the wording or oversight of previous legislation.

This is a fundamental disagreement in Constitutional law. Should courts use commonsense interpretation of the meaning of the laws or should Congress itself, as the actual elected representative, be responsible for updating laws and courts just enforce the plain meaning. It's also tinted by the fact that Congress today has become hopelessly gridlocked and obstructionist, and we're largely incapable of passing sweeping legislation. So generally if you're not a fan of big government or regulation, you're going to be biased towards one view and vice versa.

Re: Ripple notches win in SEC case over XRP cryptocurrency

#25

Post by rvz »

Looks like the crypto critics are now confused and have gone silent again after the Bitcoin leveraged ETFs getting approved and now they got this one wrong again. Just for the ones at the back, it is absolutely NOT the SEC that determines what is and what isn't a security and the SEC does NOT get the final say, which this summary judgement has already shown.

But of course complain all you want, but there was a reason why the SEC did not want the Hinman documents unsealed (whilst everyone else was screaming at another hysteria around Coinbase in [0]) and the SEC attempted to request those documents to be sealed and that was denied as well. [1]

[0] https://news.ycombinator.com/item?id=36302231

[1] https://news.ycombinator.com/item?id=36306757

Re: Ripple notches win in SEC case over XRP cryptocurrency

#26

Post by mrguyorama »

modeless wrote: post #20
chrisco255 wrote: post #8

Earlier quoted context omitted.

Not really, unless XRP is a share of a company (it's not) and promises dividends (it doesn't), there's no expectation of profit by purchasers of XRP. Profits from speculation is not the same as profits from business activities. People purchase everything from bar codes (yes, 11 digit bar codes are a commodity with limited supply), to trailers, to collectible video games, to oil and minerals, precious metals, art, ant…

Any speculative profit you hope to make on XRP is entirely reliant on the business of Ripple. They control and run and improve and promote the network, and without those efforts XRP would not have any hope of increasing in value at all. It's plain as day that people purchasing XRP rely on the efforts of Ripple the company for their expectation of profit, regardless of who they purchase the XRP from.

The thought experiment IMO should be simple: How valuable is an XRP token without Ripple as a company?

Re: Ripple notches win in SEC case over XRP cryptocurrency

#27

Post by dcolkitt »

linuxftw wrote: post #5
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…

Only appellate courts and higher set precedent. This is one ruling by one judge, means nothing for other cases.

Should be noted this decision came from an Obama appointee judge in a fairly liberal district (SDNY). The Second Circuit is half Federalist Society judges, and six out of the nine SCOTUS justices have been on a consistent battle to roll back the power of the regulatory agencies. Pretty hard to see how the case becomes more favorable for the SEC on appeal.

Re: Ripple notches win in SEC case over XRP cryptocurrency

#28

Post by dcolkitt »

modeless wrote: post #20
chrisco255 wrote: post #8

Earlier quoted context omitted.

Not really, unless XRP is a share of a company (it's not) and promises dividends (it doesn't), there's no expectation of profit by purchasers of XRP. Profits from speculation is not the same as profits from business activities. People purchase everything from bar codes (yes, 11 digit bar codes are a commodity with limited supply), to trailers, to collectible video games, to oil and minerals, precious metals, art, ant…

Any speculative profit you hope to make on XRP is entirely reliant on the business of Ripple. They control and run and improve and promote the network, and without those efforts XRP would not have any hope of increasing in value at all. It's plain as day that people purchasing XRP rely on the efforts of Ripple the company for their expectation of profit, regardless of who they purchase the XRP from.

Any speculative profit you hope to make on buying a limited edition Rolex is entirely reliant on the business of Rolex continuing to market the brand of Rolex.

But if you don't have a formal contractual relationship with Rolex SA, then it's quite simply not an investment contract.

Re: Ripple notches win in SEC case over XRP cryptocurrency

#29

Post by [deleted] »

modeless wrote: post #20
chrisco255 wrote: post #8

Earlier quoted context omitted.

Not really, unless XRP is a share of a company (it's not) and promises dividends (it doesn't), there's no expectation of profit by purchasers of XRP. Profits from speculation is not the same as profits from business activities. People purchase everything from bar codes (yes, 11 digit bar codes are a commodity with limited supply), to trailers, to collectible video games, to oil and minerals, precious metals, art, ant…

Any speculative profit you hope to make on XRP is entirely reliant on the business of Ripple. They control and run and improve and promote the network, and without those efforts XRP would not have any hope of increasing in value at all. It's plain as day that people purchasing XRP rely on the efforts of Ripple the company for their expectation of profit, regardless of who they purchase the XRP from.

[deleted]
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