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Cryptocurrency company Ripple says SEC lawsuit is imminent
- vmception 6y agoI saw some articles where they suggested this announcement is strange It is not strange, the SEC sends what are called Wells Notices to companies and reporting companies often announce the receipt of them Ripple is not a reporting company and doesnt have an asset to report on, and coming to an agreement with the SEC on staying that way has hit an impasse, for them to announce this
- hombre_fatal 6y agoI did notice Vitalik Buterin's tweet about some "strangeness": > Looks like the Ripple/XRP team is sinking to new levels of strangeness. They're claiming that their shitcoin should not be called a security for public policy reasons, namely because Bitcoin and Ethereum are "Chinese-controlled". [Two relevant screenshots of the document enclosed in tweet] https://twitter.com/VitalikButerin/status/1341219519545556992 https://twitter.com/VitalikButerin/status/134121951954555699...
- efwfwef 6y agoThanks for sharing, not sure why you're getting downvoted as Vitalik always have good insights
- octoberfranklin 6y agoIt's not weird for securities law, but Wells Notices are kinda weird in the broader context of the US legal system. The DOJ doesn't let you know they've convened a grand jury.
- seibelj 6y agoWon’t have an impact on the broader crypto market, but it will signal that the US is diehard anti-crypto. So many companies have already moved offshore, anyone trying to play in the US should get out ASAP. Who is the SEC protecting? Anyone who has bought XRP doesn’t give a shit.
- lugged 6y ago> Won’t have an impact on the broader crypto market, BTC has been struggling to push higher for a few days with bearish moves. I'm still a long term bull but I just pulled 100k out, should get a nice discount as it breaks down toward 20k. (I'll average in at anything below 21.) > Who is the SEC protecting? JP Morgan and the US e-Dollar.
- wsc981 6y ago> US e-Dollar. Or FedCoin as George Hotz called it recently in a Lex Friendman podcast [0]. P.S.: I thought this was an entertaining podcast, George is a funny guy. --- [0]: https://www.youtube.com/watch?v=_L3gNaAVjQ4 https://www.youtube.com/watch?v=_L3gNaAVjQ4
- absolutelyrad 6y ago> but it will signal that the US is diehard anti-crypto. From the article: SEC officials have declared Bitcoin and Ether to be currencies, as they are decentralized in their management, but have left the door open for others to qualify as securities, especially at the time of their issuance. So not really. The US needs to evolve to the new world.
- Supermancho 6y agoThe SEC (an extension of the Federal Reserve) can turn around and declare whatever is useful at any point, as has been observed. There's nothing special or protected about the traded Cryptos, despite the speculation. If a currency crisis arises and the market is frozen, cryptos will not be on the first lien right to trade for Fed assets (whatever that currency might end up to be) or even continue trading, depending on the decisions of the Fed. Hell, I don't expect the issued currency (cash - which the long tail of people are still using) will have that right...since the Fed board members aren't going to be running around with palettes of cash when buying goods either.
- tastyfreeze 6y agoDo you have an authoritative source for BTC and ETH being considered currencies? I think the article has it wrong. IRS treats all cryptocurrencies as property. SEC has only said they are not securities. That does not imply they are currencies.
- modeless 6y agoI kind of thought the SEC had given Ripple a pass since they waited so long, but it's a pretty clear cut case if you ask me. I don't expect the SEC to lose this one. I'm not sure what the consequences will be.
- octoberfranklin 6y agoMaybe they were saving a "slam dunk" for a politically-opportune moment.
- ramphastidae 6y agoWhat makes now a politically opportune moment?
- berkes 6y ago'Now' being 'the moment you can easily win'?
- adventured 6y agoThat depends on who you think is pulling the strings behind the scenes. The bankers are loaded with Bitcoin now (with Bitcoin having gone fully mainstream on Wall Street), so maybe it's time to eliminate/weaken some of the perceived competition. Or, because Bitcoin is at $22,500 and they'd like to tarnish the crypto market a bit if they can, cast it as a shady place, drive down institutional interest via scandal and government prosecution. It's a plausible serious competitor to fiat currencies in the coming decades. The ideal scenario for the major central banks - they who rule fiat - is that Bitcoin goes to zero. The clowns that run this world frequently view gold as a problem, a threat, and they work hard to suppress its value. They also occasionally get caught doing so. If they can figure out a good way to do it, they may assault the value of Bitcoin, directly or indirectly, given the chance. Who has a vested interest in not seeing fiat currencies weaken as the central financial instrument of every major economy? Pretty much everyone that controls everything today, the entrenched. And one other very plausible reason: this is being fired off just before an administration switch-over, because the people that have pushed for it may think it'll get lost in the shuffle, as the new administration will have its own priorities it will want pursued (such that this could get pushed down the list or neglected). It often happens in government right before admin switch-over, it's why all the anti-trust cases were rushed and fired off right before the presidency changes hands.
- jaredtn 6y agoIf your coin can be sued by the SEC, then it's probably not decentralized.
- jessehattabaugh 6y agoThey aren't suing XRP
- pstrateman 6y agoRipple is the central operator of XRP. They absolutely are suing XRP.
- dleslie 6y agoIf it thought there were grounds to do so, the SEC could take on the major BTC exchanges. Losing a means to convert to/from fiat currencies would drive away the vast majority of BTC traders, and possibly cause something of a bank run upon the announcement of SEC action against them. I mean, let's be real here, the vast majority of BTC transactions aren't for goods or services.
- nmlnn 6y agoSEC deals with securities, bitcoin is not a security according to them. Ripple(XRP) is.
- dleslie 6y agoIt's a thought exercise, not a serious suggestion that it might occur, hence "if it thought there were grounds to do so." I'm imagining how a Government with sufficient power might go about crippling the value of BTC.
- teh_infallible 6y agoA single government can’t do it, which is why bitcoin still exists.
- Zamicol 6y agoI don't understand why this hasn't happen sooner as it's been 8 years since their release. Ripple is a centralized, managed network. It's nothing like Bitcoin, Ethereum, or many other decentralized projects. Ripple is not a cryptocurrency. For years I've told loved ones, friends, and anyone with a passing interest in the nascent space to avoid Ripple like the plague.
- deleted 6y ago[deleted]
- efwfwef 6y agoIt's a currency based on cryptography, let's not try to exclude projects based on random definitions. You want to be more specific, like, it is not censorship-resistant.
- fastball 6y agoOk, but the cryptography is pointless if it's a centralized system.
- petersellers 6y agoHow so?
- treehugger412 6y agoChris Larsen is certainly spending like this won't make a dent. https://www.townofross.org/sites/default/files/fileattachments/town_council/meeting/2008/15._1_upper_road_staff_report.pdf https://www.townofross.org/sites/default/files/fileattachmen...
- mrleiter 6y agoBesides looking like a James Bond villain villa, how do you know this is him?
- octoberfranklin 6y agoAbject failure to optimize his PDF files. 20 meg PDF = guilty as charged.
- dmurray 6y agoIt's a 289 page scanned document, it's OK for it to be a few times larger than a React Hello World.
- bacheaul 6y agoWhat I've never understood about XRP and Ripple is that originally XRP was meant to only be used for paying for transactions and the ledger was meant to track IOUs between people denominated in some other "real" currency. They had videos floating around explaining the concept. In fact, they were handing out XRP for free to bootstrap the network of users [0] (that post says 1000 XRP, originally it was 30,000 XRP when the post was first created). XRPs themselves were basically worthless, but it was required to interact with the ledger (you pay maybe 0.000001 XRP per transaction). The idea was that you pass a small amount on to friends and others interested in using it to create their wallet and start tracking IOUs, and you needed to have at least 20 XRP in your wallet. Somewhere along the way all hell broke loose, Bitcoin got popular, crypto currencies in general got popular and XRP itself suddenly became worth something, the original concept got lost and everything seemed to go off the rails... That's when I lost interest. [0] https://bitcointalk.org/index.php?topic=145506.0 https://bitcointalk.org/index.php?topic=145506.0
- ehmmmmmmmm 6y agoXRP went down, interestingly enough. I would have hoped for the community to collude and vote/bid its price up to give the SEC a big "ha" and also cover the costs of lawsuits. After all crypto is one place where markets can be manipulated and the proceeds put to good use.
- 3np 6y agoI'm pretty sure this is precisely what has happened, but I'm not as happy about it.
- russdpale 6y agoit was doomed from the start, it was never a real crypto currency.
- pat2man 6y agoI remember their original pitch sounding like it made a lot of sense. Fast, cheap, verifiable trading layer for IOUs that can then be settled externally. A lot like how many stock exchanges work. Ended up selling any XRP I had two years ago when things went nuts. Now it looks like people are re-building that whole concept elsewhere and Ripple is becoming irrelevant.
- HuwytNashi_005 6y agoHello everyone I am an idiot Just letting you know Okay bye
- anupamchugh 6y agoI still remember I'd bought this coin when it was worth $3 in 2018. Sadly, it's under a dollar today.
- casualbob_uk 6y agohttps://kin.org/ https://kin.org/ got sued by the SEC for the same reason. They 'got away' with a 5m fine but were not branded a security (does that automatically declare them a currency?). They're now free to carry on development with the SEC behind them. The difference is they just moved to Solana as a token, so they're decentralized, whereas what I take from XRP is that it's not. I don't fancy XRPs chances seeing what the Kin boys and girls went through, but if they 'win', whatever that may look like, they'll be up and away.
- adventured 6y ago> does that automatically declare them a currency? If they were branded as a security that would not automatically declare them to be a currency. It would put them in the category of equity securities (with the owners having rights accordingly as equity owners). USD holders are not regarded as having an equity ownership stake in the currency for example.
- Acrobatic_Road 6y agoThe Ripple people made centralization and regulation out to be a positive thing - and now they get exactly what they deserve.
- solaarphunk 6y agoLets not forget a few years ago when Ripple was running around trying to pay companies millions of dollars to list XRP. Ripple has always operated under a thin veneer of legitimacy, but it's basically to cover up the massive exit scam that effectively happened.
- p2pai 6y agoThe real issue here is the fundraising - and in Ripple's case, the ability to sell XRPs as needed - which seems to be a fair question from the SEC given the very big amounts involved?
- redis_mlc 6y agoCan somebody tell me what the appeal of cryptocurrency is on HN still? Is this a get-rich quick schema, or what exactly? Are you all hoping for a Lambo out of this?
- asim 6y agoMake no mistake. They're going to make an example of Ripple. This is going to be horrible for them and a warning to anyone trying to run a similar Ponzi scheme. You can't centralise, hype and then cash out on vaporware without there being consequences. XRP held zero value at the time the founder cashed out and they've been trying to make their consulting business work ever since. Dare I say XRP goes to zero. Watch this space.
- artellectual 6y agoActually Ripple is not Vaporware. I work for an MTO and we use ripple XCurrent product. XRP enables MTOs to send / receive without having to use USD as an intermediary currency. This reduces costs on money transfer and also enables money transfer even when US banks are on holiday. So I can say there is real value in the network Ripple is building and also XRP itself being used as the tool for cross border remittance. As far as I can see they're delivering on their promises.
- zionic 6y agoWhy not use ether/smart contracts? Seems way better than ripple for this use case.
- artellectual 6y agoBecause who do you contact for support when something goes wrong? The problem cryptocurrency industry doesn't understand is when you work in finance you are heavily regulated. You cannot just work with "decentralized" systems and call it a day. Every action you do is answerable, everything is questioned and scrutinized. Having someone like Ripple and XCurrent as an intermediate as a regulated company helps solve a lot of problems. Since Ripple itself is regulated it's easy to justify to regulators. Ripple is also answerable when transactions delay happens. For Etherereum / Smartcontracts who do you contact for support when transactions SLAs aren't being met?
- zapdrive 6y agoBitcoin core's lightning should be the next on the chopping block of SEC.
- ur-whale 6y agoOne more proof that Ripple, being centralized, was bound to fail from day one and never was a match for Bitcoin (and all its more or less retarded cousins).
- venantius 6y agoWhat are the implications here for the Stellar project and Stellar Lumens? They seem like an awfully similar use case.
- nomad543 6y agoAll altcoins have similar use cases. For the SEC, it's not the use case, it's about whether coins were sold in ICO-like deals. Stellar didn't promote any ICOs. Coins like Ethereum are way more at risk to be the target of SEC investigations.
- qertoip 6y agoYou are correct.
- andruby 6y agoFrom what I remember Stellar started as a fork of XRP by Jed McCaleb, who also created XRP. As I understand it, technically it has evolved a lot since then, so I don't know how much of the concept is still shared with Ripple. As for what this SEC lawsuit would mean to them, your guess is as good as mine. The price of XLM has dropped a little [0] and actually tracks XRP reasonably closely [1]. [0] https://www.cryptocompare.com/coins/xlm/overview/BTC https://www.cryptocompare.com/coins/xlm/overview/BTC [1] https://www.cryptocompare.com/coins/xrp/overview/BTC https://www.cryptocompare.com/coins/xrp/overview/BTC
- RamshackleJ 6y ago2021, the year when shitcoins, scamcoins and ponzicoins have their comeuppance.
- ccortes 6y agoI think they are on a better position since they are a non-profit and they don't have token sales afaik. But I can't really tell since I'm not familiar with american laws.
- electrotype 6y agoA crypto thread on Hacker News without mentionning Monero is a sad thread.
- bitxbitxbitcoin 6y agoNo, it's a thread that's staying on topic.
- xvector 6y agoThis is a shame, Ripple was one of the few currencies with actual adoption, and actually usable for everyday transactions.
- venantius 6y agoI guess the real question is: what will actually happen if the SEC wins this case (which we should assume they will). Ripple is vast and presumably has the resources to deal with any judgement against them. The ruling would have to make the administrative burden of managing global XRP holdings unviable in order to really change the overall equation here. Is Ripple just getting slapped with a small fine in the realm of possibility?
- chinathrow 6y agoMaybe they force them to shut it down for good?
- cryptica 6y agoWhat I don't understand is why the SEC doesn't investigate the federal reserve bank? I don't see any difference between Ripple and US dollars. The SEC can only win this case if the judge is corrupt because logic is not on their side.
- ArtWomb 6y agoRipple Wells Submission Summary has been posted: https://ripple.com/wp-content/uploads/2020/12/Ripple-Wells-Submission-Summary.pdf https://ripple.com/wp-content/uploads/2020/12/Ripple-Wells-S... Primary risk seems to be de-listing from 200+ crypto exchanges
- chollida1 6y agoWe may see a pull back in a few crypto currencies soon. ETHE the grayscale Ethereum trust has skyrocketed lately and has about 285 Million shares outstanding. On January4th an additional 1.05 Billion shares come free trading as their 6 month lockup expires. Oh and its currently trading at a 200+% to its net asset value. Its conceivable Ethereum itself could double and ETHE could still drop 50%. Fun times!!
- gruez 6y agoYour first sentence claims that there's going to be "a pull back in a few crypto currencies", but then the rest of your comment seems to be talking about ETHE, which looks like some sort of ETF for holding ethereum?
- chollida1 6y agoWell I was assuming that Ripple would fall on the news that the SEC is suing the company who runs it. That makes two which is, checks definition in dictionary, a few:) I'm not exactly sure what you want me to respond to:)
- gruez 6y agoBut in the case of ETHE, it's the ETF dropping, not the cryptocurrency (ETH) itself. The same logic would apply to the reverse situation. If tether (USD stablecoin) crashes, you wouldn't say the USD was crashing.
- qes 6y agoETHE is backed by ETH. If ETHE gets sold, ETH gets sold - ~0.01 ETH per ETHE.
- zionic 6y agoReddit bag holders are dumping their XRP into BTC/ETH/Tether atm. Interesting to see what the #3 in market cap bleeding into #1 and #2 do.
- 6y ago
- JohnJamesRambo 6y agoFeeling glad I consolidated my alt index portfolio to Ethereum two days ago. XRP is currently down 9.55% for the day and will surely tank further.
- gnarbarian 6y agoThere is immense value in disrupting and supplanting the global monetary hegemony. Credit card Payment processing amounts to a 3% tax on a majority of transactions. These companies also are increasingly imposing moral judgements on who should be allowed to transact. With little recourse available to the affected. (The blacklisting of Patreon alternative New project 2, and pornhub) are examples of this. Liberating payments online to the same level we have with exchanging cash is definitely desirable. In general, crypto technology is valuable for it's ability to replace capricious monopolies with distributed implementations built on federated protocols run like a constitutional democracy. We can of course expect established monopolies and governments to retaliate in every way possible in an attempt to maintain power.
- x87678r 6y ago> Credit card Payment processing amounts to a 3% tax on a majority of transactions Only in America. Most other countries have this under control. > In general, crypto technology is valuable for it's ability to replace capricious monopolies with distributed implementations built on federated protocols run like a constitutional democracy. No, in general crypto technology is valuable because it can avoid laws created by constitutional democracies. Its a back door for money launderers and illegal payments. > We can of course expect established monopolies and governments to retaliate in every way possible in an attempt to maintain power. Exactly we voted for this government to enforce some rules, if cryptos are a way to avoid the rules, it will be made illegal.
- gnarbarian 6y ago>No, in general crypto technology is valuable because it can avoid laws created by constitutional democracies. Its a back door for money launderers and illegal payments. It's also valuable for that, but I argue it has greater value in legal transactions that currently must operate through said gatekeepers who impose extralegal restrictions.
- MadSudaca 6y agoMost other countries? Where do you get that information from? Also maybe it’ll be made illegal in some countries, but if others work as fertile grounds for crypto, they will leak into all others eventually. Specially if their advantages are too good to pass.
- SlipperySlope 6y agoBack in 2015 FinCEN (US Financial Crimes Enforcement Network) issued guidance that an administrator of a digital virtual currency had to be a Money Services Business and file Suspicious Activity Reports, perform Know Your Customer and comply with Anti-Money Laundering regulations. So Ripple filed and became an MSB in the 50 US States. So far so good. But Crypto is more than a payment method. Obviously it is purchased in hopes of capital appreciation and that makes it a Security. Accordingly, Ripple should have filed a S-1 security disclosure application with the SEC BEFORE issuing XRP. Failure to register XRP as a security should lead to big fines. So why does the US SEC leave Bitcoin and Ethereum alone? Because there is no central administrator that issues and redeems the tokens. Ideally, crypto tokens should file with the US SEC and their exchanges should be MSBs.
- deleted 6y ago[deleted]
- Triv888 6y agoIt's happening; theres like 4 posts about it on the front page of HN