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>>[...] what changes should we expect to see in the short term? The article mentions that since the company definitively sold unregistered securities to hedge

>>[...] 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

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