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ECP NETHAPPENINGS NEWSLETER 7/15/23 #Ripple, #XRP, #Coinbase, #Etherium
Gary Gensler SEC just lost the Ripple suit.
The SEC will now have to cover Ripple’s legal fees as a result.
July 2022 CEO of Ripple legal battle will cost upward of $100 Million
The US Tax payer will now need to fork over the legal fee to Ripple, cause GARY IS A FOOL.
Will this com out of the SEC Budget?
Yet, The SEC is suing on our behalf the American citizen who never elected the guy. And Gary isn’t even a lawyer. Why would Biden, Elizabeth Warren or any other Democrat want this guy in charge of our world changing economy.
Ripple Wins
“XRP, as a digital token, is not in and of itself a ‘contract, transaction, or scheme’ that embodies the Howey requirements of an investment contract.” –Judge Torres
Link to decision https://storage.courtlistener.com/recap/gov.uscourts.nysd.551082/gov.uscourts.nysd.551082.874.0_2.pdf
Don’t be misled that Judge Torres ruled that sometimes XRP is a security and sometimes it isn’t. That’s exactly the opposite of what she ruled: XRP itself is NEVER a security. “ Page 15: “XRP, as a digital token, is not in and of itself a ‘contract, transaction[,] or scheme’ that embodies the Howey requirements of an investment contract.”
FOR ALL XRP HOLDERS
VIDEO Ripple vs SEC: Congratulations XRP Holders!
From, Jeremy & Thien-Vu Hogan. And, GoodBye!
https://www.youtube.com/watch?v=FKuKAmEraSw 13:55
WHAT THE HELL !!!!
HOW MANY COCKEYED VIEWS DO WE HAVE HERE?
This WSJ article reflects two entrenched trends:
1) confusing the Ripple legal analysis by insisting “sometimes tokens are securities because of how they are sold and sometimes they are not”
WRONG, Dave and Paul
2) if the outcome is unworkable as a matter of policy then the law must have been wrongfully interpreted or applied, and the decision will be overturned.
WRONG, law professors.
“The outcome must deliver the correct policy or the decision is wrong” is precisely how courts go way off the rails – making up the law as they go to reach preferred ends. (Which law professors generally prefer them to do, and some even think they SHOULD do always.)
One of the incentive problems is that the SEC is an agency of lawyers who want to go lawyer things and measure themselves on lawyer metrics.
This is producing horribly broken outcomes and protecting nobody. Clearly the court focused on whether the transactions represented sale of securities. Whether the underlying asset is a security or a commodity seems irrelevant.
Ripple argued it is exempt from registration as XRP is not a security, but a commodity. The Court disagreed with Ripple by saying it doesn’t matter what XRP is. Rather, the conclusion would depend on the “totality of circumstances” surrounding a transaction.
The fact that Howey requires transaction level analysis and can’t be used to establish that an underlying asset is once and forever a security is itself sufficient for nuking the SEC’s entire regulation by enforcement strategy. They were just embarrassingly wrong about this.
@CGasparino Hate to break it to the XRP pumpers:
@Ripple will be paying money on the part of the case it lost; plus there isn’t a securities lawyer I’ve interviewed who thinks the part they won stands on appeal.
What to think about staking services in light of current securities laws is to some extent a more fraught issue than “is a token a security”. The latter is frankly pretty easy. SEC might think all technical services attendant to staking are “efforts of others” and “entrepreneurial”. Really, they’d probably like to say all PoS staking is a security but won’t be able to get there. But, ya know, at some point the services are just technical support. Does AWS issue an unregistered security by allowing staking nodes to run on their system? No?
Okay. Where is the line?
As they have repeatedly demonstrated, SEC will not draw one willingly and transparently. And they are incentivized by their self interest (masquerading to some extent as public concern) to draw any line as deep into the purely technical realm as they can rationalize to themselves.
Other countries are making rules. Having public debates. Getting regulators educated rather than barring their access to the tech out of some misplaced notion of conflicts of interest. This country in contrast arbitrarily punishes people to signal the legal lesson of the day.
Just banks worried about losing out in deposits.
There was a law that required taxis automobiles in New York to carry pooper scoopers for horses for decades. This is more of the same.
This country in contrast arbitrarily punishes people to signal the legal lesson of the day.
1) People still can’t grok that the asset is independent of the transaction.
Howey determines if a *transaction* was a *securities transaction* not if the asset in a transaction was a security. The asset is irrelevant.
2) @jchervinsky that’s not news at all. It’s always been the case, and the SEC has always acknowledged, that in a primary distribution you have to look beyond the token to the totality of circumstances and the economic reality. Crypto bros celebrating just proves their ignorance.
3) Clearly the court focused on whether the transactions represented sale of securities. Whether the underlying asset is a security or a commodity seems irrelevant.
4) Ripple argued it is exempt from registration as XRP is not a security, but a commodity. The Court disagreed with Ripple by saying it doesn’t matter what XRP is. Rather, the conclusion would depend on the “totality of circumstances” surrounding a transaction.
Joe Carlasare Let’s examine the logic of the SEC v Ripple decision and the finding that a token in and of itself cannot be an investment contract. If true, tomorrow, I can legally launch JoeCoin with the following characteristics. I will not promote JoeCoin or sell it initially (I’ll wait for “programmatic sales” later to make money).I’ll release it for free on the internet so that anyone can mine it with GPUs, but I’ll give myself a massive pre-mine (70% of supply).
Joe, one thing that hasn’t been discussed much yet (I think) is that with the ruling that the big initial institutional investment in XRP IS in fact a security investment, doesn’t that mean that other projects (Eth, cough) are also? Isn’t that how ethereum operates?
O, that’s right, it was a funded and promoted ICO where institutional buyers were suggested to use multiple wallets to go around the security label…
Just remember it’s not a security if you dump on retail. The one thing I like about alt coins is that it keeps the regulators distracted while the Trojan horse gets built. Unless something goes terribly wrong, they will all fail to take market share from btc because not only do they compete against btc but each other.
Judges are going to follow their interpretation of the laws as they see fit. The likely end result is SEC will compel congress to pass laws that clean all this up.
Speculation Rises for Potential IPO Following SEC Victory
This is is a huge win for Larsen, Garlinghouse and the XRP community.
1. While the court rules that some of Ripple’s “Institutional Sales” of XRP were investment contracts and thus, the sale of unregistered securities,
2. Ripple’s sales of XRP to “Programmatic Buyers” through Exchanges to anonymous buyers were NOT investment contracts.
3. Ripple’s other distributions of XRP to employees as compensation or to 3rd parties to develop applications for XRP or XRP Ledger are NOT investment contracts.
4. Larsen and Garlinghouse’s sales of XRP are NOT investment contracts.
2023 -2-22 The live price of XRP is $0.6070797 with a market cap of $31.90B USD.
2023-07-13 XRP, the world’s seventh-largest cryptocurrency IS NOW NOT A SECURITY
COINBASE
SEC v. @Coinbase update
https://twitter.com/MetaLawMan/status/1680198474149625856
We now have the transcript of the pre-motion conference held on Thursday.
Things went worse for the SEC than was initially reported.
The Judge explicitly aligned herself with Coinbase on a key argument.
That is unusual for a first appearance.
https://twitter.com/MetaLawMan/status/1680198472819982336
This must be so devastating to be in for an initial hearing and off-the-bat the judge is jumping in on Coinbase’s argument to further expound upon how ridiculous the SEC sounds.
https://assets.ctfassets.net/c5bd0wqjc7v0/46XloV2v8raTCNRhg8XTKZ/2a13c4bec44230bc8ae30ab37c01722e/Premotion_Conference_Tr.__7.13.23_.pdf
In the interest of transparency, here is the transcript from our hearing yesterday in the SDNY case brought against us by the SEC. We appreciate the Court’s careful consideration.
60 0F 66 THE IDEA THAT THE COMMISSION COULD AUTHORIZE THE OFFER AND SALE OF Coinbases’s securities to millions of retail investors and then turn around and flip-flop and say, oh, sorry, you are running a completely illegal business —
THE COURT: But not merely that. An S-1 registration statement for Coinbase to provide the very platform that apparently I’m being told today violates the securities laws. That’s what you’re really saying. Sourthern District Reporters, P.C. 212-805-0300
AND THERE IS ALWAYS ETHERIUM CORRUPTED BY THE CCP
LongLing Capital = Original funder of OKX 2
Remember, Longling Capital = Fembushi = Wanxiang = ETH Foundation = Vitalik Buterin = Promethius = CCP
Etherium 0x236F9F97e0E62388479bf9E5BA4889e46B0273C3
Blockchains / Ethereum Mainnet ? Address 0x236F9F97e0
Dr. Feng, who is head of Hashkey, setup/funded Longling Capital, Wanxiang Blockchain, and was the original funder of some of Huobi’s exchange wallets doesn’t believe the Crypto they issue needs to be backed by “any underlying assets, and the credibility of the Chinese Government alone is enough to compete with, and even outcomplete, any stable digital currency issuer in the current market”.
https://twitter.com/BoringSleuth/status/1680231089963401221
In March 2019, Dr. Feng, head of CCP controlled Wanxiang Blockchain stated:
“First of all, RMB legal digital currency linked the digital currency world will have first-mover advantage and seize the initiative of rule making in shaping the rules of blockchain digital currency.” https://twitter.com/BoringSleuth/status/1671728690453946369/photo/1
JP MORGAN owns ETHERIUM