Ripple's Open Market Sales of XRP Cryptocurrency Aren't Securities, Court Rules in Landmark Decision (fortune.com) 32
It was the court case the entire crypto industry was waiting for -- the showdown between the Securities and Exchange Commission and Ripple, an early digital assets firm behind the popular XRP token. From a report: The SEC alleged that sales of XRP constituted offering unregistered securities, while Ripple defended its $25 billion market, chiding the SEC's lack of clear guidance. On Thursday, a federal judge agreed partly in favor of both parties, with Ripple -- and the broader crypto industry -- appearing the early victor. The existential question for the U.S. crypto sector has been whether the thousands of tokens, from Bitcoin and Ether to Dogecoin and Pepecoin, are securities -- a financial term for an investment contract, which would require registration with the SEC. Crypto firms have argued that working with the agency is impossible under the current rules, while the SEC has accused nearly every token, with the clear exception of Bitcoin, as operating illegally.
Ripple became an important trial balloon for the debate. In 2020, the SEC charged the company -- founded in 2012 with the promise of disrupting the global payments network through its proprietary token, XRP -- and two of its executives with raising over $1.3 billion through an unregistered digital asset securities offering. Unlike other subjects of SEC lawsuits, Ripple challenged the case, which has been litigated for the past three years in the Southern District of New York. The proceedings have enraptured the crypto industry, especially as the SEC has aggressively pursued other exchanges and projects for allegedly offering unregistered securities. A decision that found XRP was not a security could buoy other firms and weaken the SEC's torrent of lawsuits against the industry, while a total victory for the SEC would have proved disastrous and likely climbed its way to the Supreme Court.
Ripple became an important trial balloon for the debate. In 2020, the SEC charged the company -- founded in 2012 with the promise of disrupting the global payments network through its proprietary token, XRP -- and two of its executives with raising over $1.3 billion through an unregistered digital asset securities offering. Unlike other subjects of SEC lawsuits, Ripple challenged the case, which has been litigated for the past three years in the Southern District of New York. The proceedings have enraptured the crypto industry, especially as the SEC has aggressively pursued other exchanges and projects for allegedly offering unregistered securities. A decision that found XRP was not a security could buoy other firms and weaken the SEC's torrent of lawsuits against the industry, while a total victory for the SEC would have proved disastrous and likely climbed its way to the Supreme Court.
No comments? (Score:1)
Supreme court (Score:2)
We're probably going to have to wait on this thing to reach the supreme court to be sure of anything (until the court flips).
Re: (Score:3, Insightful)
The thing about the conservative side of the court is their rulings are very solidly founded in originalism and law. It will be very difficult for a later justice to be able to overturn the rulings because the judge would have to be consciously aware their legal argument was nothing but a smokescreen for the ruling they want to make as opposed to their honest interpretation of the law.
Originalism can lead to almost any preferred outcome. When it doesn't, a dash of "law office history," the "Major Questions Doctrine" or the "Non-Delegation Doctrine," to get you where you need to go (no matter your policy preferences). FWIW, Scalia (the OG Originalist himself) was a big fan of the Chevron Doctrine (see his dissent in Meade, which narrowed Chevron deference).
Really, no elected official should want their constituents getting ripped-off though, so Congress can probably pass a law that allows
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I'm sure you've only scammed a few people with crypto.
You're full of shit. The Republican justices walk in and say, "How does my billionaire sugar daddy want me to vote?" Then that's what they do. Well, in all fairness, the Chief Injustice also asks what he thinks the court can get away with.
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Please have a look at the powers freely delegated by the First Congress [theatlantic.com] and then revisit the nondelegation doctrine. It is clearly a scam, into which Mr. Ginni and others eagerly DCA at every opportunity because they prefer the thought of a Constitution born in exile to one that isn't "the right way to do things"--or not do things as the current Court seems to prefer.
Not that I'm betting against nondelegation or Dogecoin at this point. It is hard to get a man to understand something when his vacations, fami
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"Please have a look at the powers freely delegated by the First Congress"
Your argument and you're argumentative article are built on a https://effectiviology.com/false-premise/. Additionally it takes the concept to absurdity, essentially pretending any sort of executive power or discretion would be blocked by a requirement to congress to be explicit about what it is authorizing not only is this an absurd extreme it is a strawman because the issue is not delegating power but delegating the power to legislate
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Yeah, yeah. That's it. Republican justices are into rule of law. And like ethics and stuff. Yeah! That's the ticket.
I think you mean "criminal conspiracy" (Score:3, Insightful)
"the court case the entire crypto industry was waiting for" - the most egregious misuse the word "industry" ever.
Then What Is It? (Score:5, Insightful)
If XRP and other crypto coins aren't securities, then what are they, exactly?
Re: Then What Is It? (Score:1, Offtopic)
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Re:Then What Is It? (Score:5, Informative)
Currencies, or perhaps commodities. A security wouldn't really make sense, to me at least, because they are not shares of anything and they aren't markers that the company that you buy them from owes you anything in return (except in the case of things like stabecoins or wrapped eth, but those are special cases - I'm talking about coins not derived from other coins or currencies. I have a LOT less trust in derived coins.)
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If XRP and other crypto coins aren't securities, then what are they, exactly?
Tokens, as in one of my favorite bits from the movie Brazil:
MOTHER: By the way, I saw a wonderful idea for Christmas presents at the chemists. Gift tokens. Medical gift tokens.
MRS TERRAIN: Oh, that sounds marvelous.
MOTHER: Yes, they're good at any doctor's and at many of the major hospitals -- and they're accepted for gynecological complications including Caesarean section.
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Got to love how all those idiots insist on being scam victims. Yeah, mod me down for stating the truth. Does not change reality though.
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Well, it turns out they actually ARE securities, sometimes. This is from TFA:
The 34-page decision by Judge Analisa Torres found that institutional sales of XRP by Ripple did constitute unregistered securities. The institutional salesâ"written contracts arranged with buyers such as hedge fundsâ"constituted around $728 million.
The bit that makes them NOT securities is the "individual sales", which seems to mean to 'end users' on exchanges:
More consequentially, Torres found that programmatic salesâ"sales from Ripple that occur on the open market, like exchangesâ"were not an investment contract and not a security.
I don't really get this but expect to see some analysis from finance people digging into how something can be both a security and not a security at the same time.
But, if this has the impact of reducing institutional interest in trading cryptoassets, I am not sure it's the win it's being portrayed as here.
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If XRP and other crypto coins aren't securities, then what are they, exactly?
Scams.
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Makes sense (Score:3)
When they are insecurities.
Judgment and non-paywall article (Score:3)
No paywall article https://techcrunch.com/2023/07... [techcrunch.com] this article also links to a copy of the judgment https://www.dropbox.com/scl/fi... [dropbox.com]
Told you so (Score:4, Insightful)
It's funny how I've been calling this ruling for months and so many people on this site have sat back totally smug about how the SEC was going to destroy the industry. The SEC's been on a losing streak. They lost an early battle recently against Coinbase, they've lost this.
Do you want to know what? Unlike the vast majority of you, the federal judiciary are highly trained in federal statutes and case law. They are not amused with the SEC's behavior, particularly its schizophrenic behavior as a regulatory body. The head of the SEC couldn't even give a straight answer to Congress why Ethereum is a commodity, but XRP and most others are securities.
Irrespective of whether crypto is a good thing to own, the courts are correctly ruling that most cryptos are insufficiently similar to a security to be under the SEC's jurisdiction. The SEC hates this. From a regulatory point of view, it's irrelevant because as we have seen time and time again, the SEC is irrelevant because the DoJ has more than enough authority to handle abuses.
Kill the Harvard Grads (Score:1)
They're fucking the country up. They just need to all die. Yale too. Hell, get rid of every single ivory league cuck.
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Big win Ripple against SEC (Score:1)