As expected... Breaking: Ripple wins case against SEC as judge rules XRP is not a security CEO Brad Garlinghouse recently opined that the case would end soon, but the fight for crypto wasn’t over yet. 105297Total views 1144Total shares Listen to article 0:55 BREAKING NEWS Join us on social networks Ripple Labs scored a victory in the United States District Court in the Southern District of New York on July 13 as Judge Analisa Torres ruled in favor of the company in a case brought forth by the Securities and Exchange Commission dating back to 2020. According to documents filed on July 13, Judge Torres has granted summary judgement in favor of Ripple Labs allowing that the XRP XRP $0.81 token is not a security. The SEC lawsuit sought to compel Ripple to stop offering its XRP token under the premise that XRP was a security and, thus, required additional regulation. Per court documents viewed by Cointelegraph: “Defendants’ motion for summary judgment is GRANTED as to the Programmatic Sales, the Other Distributions, and Larsen’s and Garlinghouse’s sales, and DENIED as to the Institutional Sales.” Within a matter of minutes after the news broke, the price of XRP has catapulted from $0.45 to $0.61. This puts the token up over 25% as of the time of this article’s publishing. The case against Ripple has been ongoing since December 2020 when the SEC sued Ripple and its two chief executives, Brad Garlinghouse and Chris Larsen, over allegations the company was offering an unregistered security. Over the past three years, the case has had its fair share of dramatic intrigue, including the release of the “Hinman Documents” and ongoing defiance in the face of the SEC’s accusations from Garlinghouse. Along with the palpable movement demonstrated by the XRP token pumping on the news, the overall sentiment across the crypto community appears to be one of jubilation.
The ruling by the U.S. District Court for the Southern District of New York amounted to a partial win for both parties. The judge said tokens Ripple sold to institutional buyers pursuant to written contracts did meet the securities test. However, the judge also said tokens sold in through the use of trading algorithms to the general public on digital-assets exchanges didn’t meet that test. Crucially, the judge said that the nature of the transaction itself, rather than the token, determined its status under the law. https://www.barrons.com/articles/coinbase-stock-ripple-lawsuit-b906d7b0
Finally! It will be interesting to see what impact this will have on the SEC's current "legislation by enforcement" strategy moving forward.
Soon there will be another organization NSEC Non-Securities and Exchange Commission to catch things like XRP. Anyway, congrats to those who have XRP a day earlier. Their profits doubled overnight.
And with this guideline they can now say that most Coins sold through exchanges with the same criteria will not be securities either. This is really a win for the entire crypto market. XRP is probably the closest you can get to being a security
If by IRS definition crypto currencies are "commodities", then it is crystal clear that the SEC has no jurisdiction over ANY crypto asset. Congress should finally wake up and put a legal framework in place that clarifies. They should have done so ages ago. Switzerland has a legal framework, Singapore, the European Union has one. Clear rules.
Binance Lays Off Over 1,000 Employees Crypto exchange reduces workforce as Justice Department investigation continues By Patricia Kowsmann and Caitlin Ostroff July 14, 2023 12:30 pm ET The Securities and Exchange Commission is separately suing two major cryptocurrency platforms, Binance and Coinbase. WSJ’s Caitlin Ostroff breaks down the lawsuits and their potential impact on the crypto industry. Photo illustration: Adam Adada/Xingpei Shen Binance, the giant crypto exchange, is cutting a big chunk of its workforce as it grapples with federal investigations and regulatory crackdowns in the U.S. and abroad that could radically diminish its business. Over 1,000 people have been fired in recent weeks, according to a person familiar with the moves. The exercise, which is continuing, could result in Binance losing more than a third of its staff, the person said. More employees were laid off this week, according to former employees, who said customer-service workers were heavily affected. The cuts were global, including about three dozen customer-service employees in India. The Wall Street Journal has reported layoffs and resignations were taking place, including in the U.S., but the scope of the cuts weren’t known. A Binance spokesman confirmed employees were being let go but declined to say how many. “As we prepare for the next major bull cycle, it has become clear that we need to focus on talent density across the organization to ensure we remain nimble and dynamic. This is not a case of rightsizing, but rather, re-evaluating whether we have the right talent and expertise in critical roles,” he said. Advertisement - Scroll to Continue Before the layoffs, Binance had a global staff of 8,000. Binance celebrated its six-year anniversary on Friday. PHOTO: DADO RUVIC/REUTERS The exchange has been the target of a series of actions by U.S. regulators over the past months as they try to control an industry that for long ran loose. The Securities and Exchange Commission sued the company and its founder, Changpeng Zhao, in June. It alleges they illegally operated in the country and misused customer funds, among other things. Binance has denied the allegations. The exchange has also faced setbacks in Europe as it tries to get licenses to operate. The biggest challenge for the exchange, however, is a continuing investigation by the Justice Department. The Journal reported last week that Binance executives have grown worried that the DOJ will file charges against the firm and Zhao. Zhao has resisted giving up control of the company or stepping aside, and many inside the firm believe his staying could put Binance’s survival into question, the Journal reported. A series of high-profile employees recently left, including its general counsel, chief strategy officer and head of investigations. Amid fears of a Justice Department action, the exchange decided to eliminate any physical presence in the U.S., where it is relocating or laying off about 150 people. Binance has a separate exchange in the U.S., Binance.US, whose workforce is separate and which is facing its own challenges. After the SEC lawsuit its market share took a dive. On Friday, Binance celebrated its six-year anniversary. “We can’t wait for what lies ahead,” it said in a tweet message.
Here is Matt Levine's (Bloomberg) column on the Ripple ruling: https://tinyurl.com/230714bblevinemxrp This is a gift article. A Bloomberg subscription is not required. The link expires in seven days. I have not read the opinion yet. But I would be willing to wager a good sum of money that the SEC appeals, and that the ruling is swiftly overturned. The reasoning is absurd. Levine does a great job of picking it apart, and I'm not going to try to outdo him. But I will say that the idea that an instrument is sometimes a security and sometimes it isn't, and that this somehow hinges on who is buying it and who is selling it, and whether the sale was made with certain disclosures, is completely absurd. The judge's reasoning could easily be extended to almost any stock on the secondary market, meaning that stock is only a security when it is purchased from the issuer. The appeals court is not going to let this stand. And if the ruling does stand, then it will be the impetus for Congress to take action, and pass federal legislation that supersedes the Howey test, and provides a more formal definition for what is and what is not a security.
I actually don't think its so absurd. A simple analogy that I could use is this. (granted, it may not apply directly enough to the case, but I think it still makes sense to illustrate how one thing can sometimes be different things) Gold for example is sometimes just gold, but sometimes its jewelry. They both are made of gold, the element, but at a certain point, with enough manipulation, it becomes jewelry. In my home insurance policy, they state that they cover the loss of gold or silver coins that are collectibles, but they don't cover just regular gold or silver bars. It sucks in some ways for those who want to own precious metals, but I can also understand the difference. If we still had stock certificates these days on paper, the ones that people used to put in their safety deposit box, I can understand how a person could buy a stock, knowing full well what this represented from a business perspective and that this was in fact partial ownership of a company. But someone else might just know that these pieces of paper can be exchanged for cold, hard cash and have no understanding of what a stock in a company is. We also make distinctions all the time when it comes to cases of murder. If you purposefully drive your car into somebody, it can result in a first degree murder charge. But if you are simply reckless with how you're driving, it might be manslaughter. And if you tried to avoid the person, and in fact, if the person was crossing the street on a red light, then killing this person with your car shouldn't result in any charges. The end result in all cases is the same, a dead pedestrian, but the consequences can be vastly different for the driver of the vehicle depending on the circumstances.