11 ms·

Ripple notches win in SEC case over XRP cryptocurrency

154 points by ideksec 3y ago

nonethewiser 3y ago
This is supposed to be pretty huge. Besides coinbase and others relisting XRP what changes should we expect to see in the short term?
- otoburb 3y ago
  >>[...] 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 further problems to tackle in the near future. >>This is supposed to be pretty huge. 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, assuming the case is kicked further up the court hierarchy on appeal.
  - chrisco255 3y ago
    This part I don't understand, aren't those institutions "accredited investors"?
    - zaroth 3y ago
      There are specific regulations that carve-out ways to sell unregistered securities to accredited investors. For example, Rule 504 and 506 under "Regulation D", but they have limits on the amount raised ($10mm for 504) or limits on solicitation, which perhaps Ripple did not adhere to? You also have to file a Form D to claim the exemption ahead of time, which perhaps they didn't do?
    - otoburb 3y ago
      As usual, Matt Levine has a great article[1] on this topic. [1] https://www.bloomberg.com/opinion/articles/2023-07-14/ripple-is-a-security-and-it-isn-t https://www.bloomberg.com/opinion/articles/2023-07-14/ripple...
  - WinstonSmith84 3y ago
    > 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. Yes, they didn't lose everything but that was also not possible to begin with
    - Psyonic 3y ago
      Didn't EOS sell $4B worth? https://decrypt.co/80144/4-4-billion-eos-token-raise-fueled-wash-trading-says-new-research https://decrypt.co/80144/4-4-billion-eos-token-raise-fueled-...
      - WinstonSmith84 3y ago
        Fair enough, forgot about that one... At least for EOS, that's a blockchain, and the token has a utility unlike XRP. Also in defence to the EOS foundation, which to me acts in good faith, it's block.one (the company at the origin of EOS) which pocketed the whole $4b
- yieldcrv 3y ago
  Many ICOs done in the US followed similar but even more refined legal rational and it doesnt really matter if institutional sales are unregistered securities because there are many registration exemptions to rely upon for sales to institutional
WinstonSmith84 3y ago
"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 "partial" :-)
- linuxftw 3y ago
  Only appellate courts and higher set precedent. This is one ruling by one judge, means nothing for other cases.
  - granzymes 3y ago
    Appellate courts set binding precedent, but district courts routinely look to eachother for guidance on how to rule on questions where there is no circuit/SCOTUS ruling. Similarly, a judge in one circuit may look to the decision of a different circuit court when their own circuit has yet to rule on an issue.
  - dcolkitt 3y ago
    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.
    - gjsman-1000 3y ago
      Well, that's just fantastic for the SEC in their newly-launched battle against Coinbase. Good luck with that, Gensler.
  - yieldcrv 3y ago
    The SEC would be dumb as hell to appeal this ruling, 2nd circuit could rule in the SEC’s favor but this Supreme Court? I double dare the SEC to appeal The commission might not exist the very next day and that would be hilarious, they’ll take it back to the New Deal itself and wonder why the SEC survived when so many other New Deal programs got overturned
modeless 3y ago
> But Torres ruled Ripple's XRP sales on public cryptocurrency exchanges were not offers of securities under the law, because purchasers did not have a reasonable expectation of profit tied to Ripple's efforts. > Those sales were "blind bid/ask transactions," she said, where the buyers "could not have known if their payments of money went to Ripple, or any other seller of XRP." I bet this gets overturned on appeal. It makes no sense to me. Seems like a huge loophole if it stands. Maybe it's explained better in the actual ruling, anyone have a link? Of course you can count on Reuters to never link to important information.
- otoburb 3y ago
  >>Maybe it's explained better in the actual ruling, anyone have a link? The docket[1] has the ruling[2], but there's very little additional detail provided beyond the focus on "blind transactions" to invalidate one of the Howey prongs[3]. As an aside, thank goodness for Court Listener and the RECAP/PACER archive! [1] https://www.courtlistener.com/docket/19857399/securities-and-exchange-commission-v-ripple-labs-inc/ https://www.courtlistener.com/docket/19857399/securities-and... [2] https://www.courtlistener.com/docket/19857399/874/securities-and-exchange-commission-v-ripple-labs-inc/ https://www.courtlistener.com/docket/19857399/874/securities... [3] https://www.sec.gov/corpfin/framework-investment-contract-analysis-digital-assets https://www.sec.gov/corpfin/framework-investment-contract-an...
- chrisco255 3y ago
  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, antiques, etc etc all on speculation that they'll be worth more in the future.
  - modeless 3y ago
    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.
amluto 3y ago
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 actually engage in a sale of securities.
- raingrove 3y ago
  Not at all. The shares in a C-corp are securities because they will definitely pass the Howey Test. Also, stocks are considered securities by a statute. It is unclear whether XRP tokens themselves pass the Howey test. (I believe the Howey Test is extremely outdated and needs to be revamped, but that's a different topic.)
- dcolkitt 3y ago
  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.
choppaface 3y ago
This is a decision on a motion for summary judgement, not on the merits.
- fallingknife 3y ago
  I think that's even worse for the SEC? Isn't a summary judgment basically the judge saying their case isn't even strong enough to go to trial?
monero-xmr 3y ago
2024 will be massive. Shitcoin explosion plus bitcoin halving = crypto mayhem.
- Scoundreller 3y ago
  That and the carrying cost of things that don’t generate income has gone up a lot.
  - DANmode 3y ago
    Could you clarify your meaning here? Thanks!
    - ac29 3y ago
      You can invest your money in extremely safe US treasuries yielding >5% right now. If you instead choose to invest in something that doesn't generate any income, it needs to generate a return some other way or you are losing money compared to the do nothing option of investing in risk-free assets.
      - monero-xmr 3y ago
        ETH staking has similar APY except paid in ETH itself. It isn’t that dissimilar in payout.
WhereIsTheTruth 3y ago
[flagged]
- scottiebarnes 3y ago
  Yeah those U.S District Judges are known for using their rulings as pumps; she's clearly only looking for exit liquidity.
- WhereIsTheTruth 3y ago
  [flagged]
deleted 3y ago
[deleted]
yieldcrv 3y ago
The SEC would be really dumb to take this to this Supreme Court I wouldn't even appeal to the appellate court if I were them, if they want to even exist after the subsequent round I think we got this in the bag ya’ll
rvz 3y ago
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 https://news.ycombinator.com/item?id=36302231 [1] https://news.ycombinator.com/item?id=36306757 https://news.ycombinator.com/item?id=36306757
- eric_cc 3y ago
  There is a lot of hate here for crypto but you have seen nothing yet. The cognitive dissonance is going to be a sight to behold in the next 365 days.
shrimpx 3y ago
The SEC should've left crypto alone. Instead of crypto getting destroyed by the SEC, now it looks like the SEC might get destroyed by the judicial branch if they choose to go up the chain with this case. This SCOTUS is massively unfavorable toward the executive making up rules to enforce, or taking liberties with interpreting standing law. If it gets there I imagine a 6-3 Alito opinion gutting the SEC's wiggle room in defining a 'security' and enforcement reach.
- constantly 3y ago
  And with the deep pockets of the crypto puppet masters and all the evidence coming out about the Justice’s susceptibility to taking as many “gifts” as they can get their hands on, that just further solidifies the pre-determined outcome.
  - shrimpx 3y ago
    The US has a standing doctrine called 'delegation', where the executive is allowed to make up rules and enforce them. The Federalist Society finds that doctrine to be unconstitutional and wants to chip away at it. All 6 conservative justices have ties to the Federalist Society, so it really doesn't require any lavish gifts in this case.
    - zdragnar 3y ago
      Even the doctrine of delegation has limits, and most of the executive branch isn't elected, so the only real check on their power is the judiciary. Congress (whichever half shares the party with the presidency) loves delegation, because it means they aren't to blame when people don't like the results- they don't even have to take a position by voting!
nobrains 3y ago
What does this mean for Ycombinator's Stellar?
- wonderwonder 3y ago
  probably not good news, Stellar was created to compete with XRP
  - DennisP 3y ago
    The markets seem to disagree, Stellar is up 53% today.
rahimnathwani 3y ago
IANAL The court ruled that: - Ripple's sales of XRP to institutional buyers were investment contracts, but - programmatic sales via an anonymous exchange were not. The ruling emphasises the distinction between an asset and an investment contract. An orange grove isn't an investment contract. The sale of an orange grove may or may not be an investment contract. Determining whether or not is governed by the Howie test. If ChatGPT is to be believed (ha!), secondary sales of common stocks are not investment contracts: https://chat.openai.com/share/d3865e23-9210-4977-bda5-b4ded8 https://chat.openai.com/share/d3865e23-9210-4977-bda5-b4ded8... If you don't want to read the whole ruling, look at pages 13-15 and 22-24.
- travisjungroth 3y ago
  > The sale of an orange grove may or may not be an investment contract. Determining whether or not is governed by the Howie test. I liked the era when people vaguely claimed that their coins weren’t a security because securities need to be registered. It had an “I’m not an alcoholic, alcoholics go to meetings” flare to it. I tried to get in on the fun with a vaporware cryptocurrency, OrangeGroveCoin. It got a disturbing amount of investment interest.
glerk 3y ago
Great day for crypto and for financial freedom in general. Great to see the justice system finally rebuking these unelected bureaucrats and placing some limits on the power they claim to have.
- choppaface 3y ago
  Ripple still faces over $700m of unregistered security sales as part of the decision.
  - wonderwonder 3y ago
    That's really not a lot of money for them to lose. This is a massive win for them and alt coins in general.
    - choppaface 3y ago
      The liability to “sophisticated investors” prevents immediate dismissal. Now the court gets to see that complicated institutionals were speculating on XRP, and that means the Court will get to consider how easy it was to speculate or “invest.” XRP requires no mining, it’s a share offering no different than any security sale.
    - DANmode 3y ago
      That's the value of the alleged financial crime transactions crimes they committed...not the value of the penalties.
  - LatteLazy 3y ago
    You don't have to register to sell to qualified investors right (which those were)?
- burnte 3y ago
  The unelected bureaucrats are authorized by duly elected politicians. They do not coalesce in office from the ether, they're put there by elected officials. It's not like there's no oversight.
1vuio0pswjnm7 3y ago
https://www.courtlistener.com/docket/19857399/874/securities-and-exchange-commission-v-ripple-labs-inc/ https://www.courtlistener.com/docket/19857399/874/securities... https://storage.courtlistener.com/recap/gov.uscourts.nysd.551082/gov.uscourts.nysd.551082.874.0_4.pdf https://storage.courtlistener.com/recap/gov.uscourts.nysd.55...
scaramuch 3y ago
[dead]

154 points by ideksec 3y ago

This is supposed to be pretty huge. Besides coinbase and others relisting XRP what changes should we expect to see in the short term?

otoburb 3y ago
>>[...] 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 further problems to tackle in the near future. >>This is supposed to be pretty huge. 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, assuming the case is kicked further up the court hierarchy on appeal.
- chrisco255 3y ago
  This part I don't understand, aren't those institutions "accredited investors"?
  - zaroth 3y ago
    There are specific regulations that carve-out ways to sell unregistered securities to accredited investors. For example, Rule 504 and 506 under "Regulation D", but they have limits on the amount raised ($10mm for 504) or limits on solicitation, which perhaps Ripple did not adhere to? You also have to file a Form D to claim the exemption ahead of time, which perhaps they didn't do?
  - otoburb 3y ago
    As usual, Matt Levine has a great article[1] on this topic. [1] https://www.bloomberg.com/opinion/articles/2023-07-14/ripple-is-a-security-and-it-isn-t https://www.bloomberg.com/opinion/articles/2023-07-14/ripple...
- WinstonSmith84 3y ago
  > 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. Yes, they didn't lose everything but that was also not possible to begin with
  - Psyonic 3y ago
    Didn't EOS sell $4B worth? https://decrypt.co/80144/4-4-billion-eos-token-raise-fueled-wash-trading-says-new-research https://decrypt.co/80144/4-4-billion-eos-token-raise-fueled-...
    - WinstonSmith84 3y ago
      Fair enough, forgot about that one... At least for EOS, that's a blockchain, and the token has a utility unlike XRP. Also in defence to the EOS foundation, which to me acts in good faith, it's block.one (the company at the origin of EOS) which pocketed the whole $4b
yieldcrv 3y ago
Many ICOs done in the US followed similar but even more refined legal rational and it doesnt really matter if institutional sales are unregistered securities because there are many registration exemptions to rely upon for sales to institutional

WinstonSmith84 3y ago

"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 "partial" :-)

linuxftw 3y ago
Only appellate courts and higher set precedent. This is one ruling by one judge, means nothing for other cases.
- granzymes 3y ago
  Appellate courts set binding precedent, but district courts routinely look to eachother for guidance on how to rule on questions where there is no circuit/SCOTUS ruling. Similarly, a judge in one circuit may look to the decision of a different circuit court when their own circuit has yet to rule on an issue.
- dcolkitt 3y ago
  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.
  - gjsman-1000 3y ago
    Well, that's just fantastic for the SEC in their newly-launched battle against Coinbase. Good luck with that, Gensler.
- yieldcrv 3y ago
  The SEC would be dumb as hell to appeal this ruling, 2nd circuit could rule in the SEC’s favor but this Supreme Court? I double dare the SEC to appeal The commission might not exist the very next day and that would be hilarious, they’ll take it back to the New Deal itself and wonder why the SEC survived when so many other New Deal programs got overturned

modeless 3y ago

> But Torres ruled Ripple's XRP sales on public cryptocurrency exchanges were not offers of securities under the law, because purchasers did not have a reasonable expectation of profit tied to Ripple's efforts. > Those sales were "blind bid/ask transactions," she said, where the buyers "could not have known if their payments of money went to Ripple, or any other seller of XRP." I bet this gets overturned on appeal. It makes no sense to me. Seems like a huge loophole if it stands. Maybe it's explained better in the actual ruling, anyone have a link? Of course you can count on Reuters to never link to important information.

otoburb 3y ago
>>Maybe it's explained better in the actual ruling, anyone have a link? The docket[1] has the ruling[2], but there's very little additional detail provided beyond the focus on "blind transactions" to invalidate one of the Howey prongs[3]. As an aside, thank goodness for Court Listener and the RECAP/PACER archive! [1] https://www.courtlistener.com/docket/19857399/securities-and-exchange-commission-v-ripple-labs-inc/ https://www.courtlistener.com/docket/19857399/securities-and... [2] https://www.courtlistener.com/docket/19857399/874/securities-and-exchange-commission-v-ripple-labs-inc/ https://www.courtlistener.com/docket/19857399/874/securities... [3] https://www.sec.gov/corpfin/framework-investment-contract-analysis-digital-assets https://www.sec.gov/corpfin/framework-investment-contract-an...
chrisco255 3y ago
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, antiques, etc etc all on speculation that they'll be worth more in the future.
- modeless 3y ago
  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.

amluto 3y ago

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 actually engage in a sale of securities.

raingrove 3y ago
Not at all. The shares in a C-corp are securities because they will definitely pass the Howey Test. Also, stocks are considered securities by a statute. It is unclear whether XRP tokens themselves pass the Howey test. (I believe the Howey Test is extremely outdated and needs to be revamped, but that's a different topic.)
dcolkitt 3y ago
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.

choppaface 3y ago

This is a decision on a motion for summary judgement, not on the merits.

fallingknife 3y ago
I think that's even worse for the SEC? Isn't a summary judgment basically the judge saying their case isn't even strong enough to go to trial?

monero-xmr 3y ago

2024 will be massive. Shitcoin explosion plus bitcoin halving = crypto mayhem.

Scoundreller 3y ago
That and the carrying cost of things that don’t generate income has gone up a lot.
- DANmode 3y ago
  Could you clarify your meaning here? Thanks!
  - ac29 3y ago
    You can invest your money in extremely safe US treasuries yielding >5% right now. If you instead choose to invest in something that doesn't generate any income, it needs to generate a return some other way or you are losing money compared to the do nothing option of investing in risk-free assets.
    - monero-xmr 3y ago
      ETH staking has similar APY except paid in ETH itself. It isn’t that dissimilar in payout.

WhereIsTheTruth 3y ago

[flagged]

scottiebarnes 3y ago
Yeah those U.S District Judges are known for using their rulings as pumps; she's clearly only looking for exit liquidity.
WhereIsTheTruth 3y ago
[flagged]

deleted 3y ago

[deleted]

yieldcrv 3y ago

The SEC would be really dumb to take this to this Supreme Court I wouldn't even appeal to the appellate court if I were them, if they want to even exist after the subsequent round I think we got this in the bag ya’ll

rvz 3y ago

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 https://news.ycombinator.com/item?id=36302231 [1] https://news.ycombinator.com/item?id=36306757 https://news.ycombinator.com/item?id=36306757

eric_cc 3y ago
There is a lot of hate here for crypto but you have seen nothing yet. The cognitive dissonance is going to be a sight to behold in the next 365 days.

shrimpx 3y ago

The SEC should've left crypto alone. Instead of crypto getting destroyed by the SEC, now it looks like the SEC might get destroyed by the judicial branch if they choose to go up the chain with this case. This SCOTUS is massively unfavorable toward the executive making up rules to enforce, or taking liberties with interpreting standing law. If it gets there I imagine a 6-3 Alito opinion gutting the SEC's wiggle room in defining a 'security' and enforcement reach.

constantly 3y ago
And with the deep pockets of the crypto puppet masters and all the evidence coming out about the Justice’s susceptibility to taking as many “gifts” as they can get their hands on, that just further solidifies the pre-determined outcome.
- shrimpx 3y ago
  The US has a standing doctrine called 'delegation', where the executive is allowed to make up rules and enforce them. The Federalist Society finds that doctrine to be unconstitutional and wants to chip away at it. All 6 conservative justices have ties to the Federalist Society, so it really doesn't require any lavish gifts in this case.
  - zdragnar 3y ago
    Even the doctrine of delegation has limits, and most of the executive branch isn't elected, so the only real check on their power is the judiciary. Congress (whichever half shares the party with the presidency) loves delegation, because it means they aren't to blame when people don't like the results- they don't even have to take a position by voting!

nobrains 3y ago

What does this mean for Ycombinator's Stellar?

wonderwonder 3y ago
probably not good news, Stellar was created to compete with XRP
- DennisP 3y ago
  The markets seem to disagree, Stellar is up 53% today.

rahimnathwani 3y ago

IANAL The court ruled that: - Ripple's sales of XRP to institutional buyers were investment contracts, but - programmatic sales via an anonymous exchange were not. The ruling emphasises the distinction between an asset and an investment contract. An orange grove isn't an investment contract. The sale of an orange grove may or may not be an investment contract. Determining whether or not is governed by the Howie test. If ChatGPT is to be believed (ha!), secondary sales of common stocks are not investment contracts: https://chat.openai.com/share/d3865e23-9210-4977-bda5-b4ded8 https://chat.openai.com/share/d3865e23-9210-4977-bda5-b4ded8... If you don't want to read the whole ruling, look at pages 13-15 and 22-24.

travisjungroth 3y ago
> The sale of an orange grove may or may not be an investment contract. Determining whether or not is governed by the Howie test. I liked the era when people vaguely claimed that their coins weren’t a security because securities need to be registered. It had an “I’m not an alcoholic, alcoholics go to meetings” flare to it. I tried to get in on the fun with a vaporware cryptocurrency, OrangeGroveCoin. It got a disturbing amount of investment interest.

glerk 3y ago

Great day for crypto and for financial freedom in general. Great to see the justice system finally rebuking these unelected bureaucrats and placing some limits on the power they claim to have.

choppaface 3y ago
Ripple still faces over $700m of unregistered security sales as part of the decision.
- wonderwonder 3y ago
  That's really not a lot of money for them to lose. This is a massive win for them and alt coins in general.
  - choppaface 3y ago
    The liability to “sophisticated investors” prevents immediate dismissal. Now the court gets to see that complicated institutionals were speculating on XRP, and that means the Court will get to consider how easy it was to speculate or “invest.” XRP requires no mining, it’s a share offering no different than any security sale.
  - DANmode 3y ago
    That's the value of the alleged financial crime transactions crimes they committed...not the value of the penalties.
- LatteLazy 3y ago
  You don't have to register to sell to qualified investors right (which those were)?
burnte 3y ago
The unelected bureaucrats are authorized by duly elected politicians. They do not coalesce in office from the ether, they're put there by elected officials. It's not like there's no oversight.

1vuio0pswjnm7 3y ago

https://www.courtlistener.com/docket/19857399/874/securities-and-exchange-commission-v-ripple-labs-inc/ https://www.courtlistener.com/docket/19857399/874/securities... https://storage.courtlistener.com/recap/gov.uscourts.nysd.551082/gov.uscourts.nysd.551082.874.0_4.pdf https://storage.courtlistener.com/recap/gov.uscourts.nysd.55...

scaramuch 3y ago

[dead]