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Alluvial

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  1. Yes exactly, the way Double G is going, everyone who raised a hand will be receiving a Wells Notice in the very near future!
  2. Great article for us, and the NY Post and Charles Gasparino are big names. Things are looking better for us with each passing day.
  3. Gensler will be on CNBC on Tuesday, August 4 at 8:00 am ET. I'm sure it will be the usual platitudes.
  4. Pablo, thank you for your posts. I know that everyone looks forward to reading them, including me. I would like to respectfully make a few responses to your recent post. On the above quote, yes, the letter references the confusion in the marketplace regarding digital assets as it exists today. But I think the inference here is that it's been confusing for market participants since the beginning; it's not like these commissioners IMO are suggesting that it was clear and unambiguous before, and now, today, it's confusing. As attorneys, we plead in the alternative. The primary defenses are: (1) xrp is not a security, but (2) even if it is defendants are not liable because no fair notice by the SEC was provided. IMO there is no assumption at all that defendants are conceding that they breached the Securities Act by asserting their fair notice defense. I think your point is that the only way we get to the fair notice defense is if the court first concludes that the xrp sales by Ripple violated the Securities Act. However, one thing I am unsure about is whether it is possible for Ripple to raise the fair notice defense first with the court before the court addresses whether the xrp sales violated securities laws. Something to the effect of "the court does not need to address whether the xrp sales violated the securities act because clearly there was no fair notice." I don't know; it could very well be that it cannot be argued that way. IMO, the fair notice defense is stronger than the defense relating to whether defendant's xrp sales violated the Securities Act. I agree with this to some extent. The reason that this case (and others digital asset cases relating to fair notice) is distinguishable from your analogy about corporate malfeasance, however, is because there was no clear guidance about what does and does not violate securities laws as it relates to sales of digital assets. My recollection is that in the Upton case, that Ripple relies upon (which I skimmed a while ago), the court determined that Upton had not received fair notice of a securities violation because the SEC had known about the conduct violating the Securities Act (taking place at numerous companies), but didn't do anything about it until after they issued guidance about it. Upton was not liable because all the transactions in question were pre-guidance transactions. IMO, I think it would actually help a lot (especially those in the xrp community) because it would mean that all xrps trading in the secondary market are not securities. (Also, just because prior sales - such as in 2013-2014 - may have been investment contracts, future sales may not be because of the ubiquity and utility that now exists. That was the basis for Hinman saying that early ether sales (ICO) may have violated the Securities Act, but subsequent sales did not (from what I recall)). But even if future sales by Ripple are later deemed to be securities transactions, they would have to be registered. They would not be prohibited - Ripple would register and sell to accredited investors who would have to hold it for a period of time. A win on fair notice would allow xrp to be re-listed by exchanges, and banks and FIs would be free to use it without fear that those xrps are securities. That has probably been one of the fears regarding xrp which has prevented its greater adoption for use as a bridge currency or otherwise. I think (and hope) that would cause the price of xrp to rise dramatically. That would help a lot of people on this site. ))
  5. Pablo is obviously one of the top legal minds on these issues. Although I am an attorney as well, this isn't my area, and my knowledge about it and the applicable standards, admittedly little, is based on my following of this particular case. That being said, while the formal letter of the two SEC commissioners doesn't go to "the legal status of XRP," doesn't it go to the issue of whether there was fair notice of what constitutes a securities violation? The SEC commissioners state "there is a decided lack of clarity for market participants around the application of the securities laws to digital assets and their trading." That sounds a lot like how Ripple is framing its fair notice defense. And that's not some hired expert saying it, or someone in the field, it's current SEC commissioners, two out of five of them, saying this about the current ambiguity that still exists today for market participants. This will have an impact on the judge IMO. If this fair notice defense issue were to go to the jury, I just can't see how it would conclude that Ripple had fair notice (even if the letter isn't admissible - and I don't know about that either way). My early guess is that Ripple has around a 90% chance of winning on the fair notice defense (based on what I know). What is your best guess percentage?
  6. Do we know which attorney(s) will be deposing Hinman?
  7. Anything that Luke Harding writes can be immediately disregarded. His record is really bad.
  8. I think that is just one part of Ripple's fair notice defense. The issue as I understand it is: would a reasonable person in the marketplace, give the totality of the circumstances, consider xrp to be a security based on the conduct/inaction of the SEC? Just one sliver of that is: the SEC sat on its hands for nearly a decade knowing full well that Ripple, a big company, was selling xrp without registration. A reasonable person would rightly factor that into his/her analysis in determining whether xrp is a security. On top of that, you have so many other factors that favor the conclusion that a reasonable person would not deem xrp to be a security - just some are: 200 or so exchanges listing xrp when those exchanges don't generally have securities licenses. Those exchanges, a reasonable person would think, are not intentionally disregarding US securities laws, so they didn't think xrp was a security, and the SEC's inaction further supports that; FINCEN determined that xrp was a virtual currency; every country that opined on xrp has said it is not a security; bitcoin and ether (the latter being an ICO) were claimed by the SEC not to be securities, but the 3rd highest ranked crypto is?; the Moneygram approval where the SEC knew that xrp would be used and those sales not being registered. And when we see that the cases the SEC has filed in this area are either about not registering for the sale of actual shares of the company (not crypto) and just ICOs, it seems like Ripple has a very strong defense here. The SEC itself likely was unsure of whether it was a security. Also, it would be interesting to know how many SEC cases (other than ICOs which sound like an offering) have been brought that did not involve written investment contracts between the company and the purchaser. Ripple seems to have cleared one of the big hurdles regarding this defense by having the court adopt its proposed standard for the defense as opposed to the standard the SEC wanted to the court to use. [Edit: it appears that the issue is based on the actions and inactions of the SEC in terms of what a reasonable person would think regarding the nature of xrp, not necessarily the conduct of third parties - as a result, some of the various facts favoring Ripple on this issue referenced above which do not directly involve the SEC may not be relevant to the court's analysis]. It would remain to be seen how future sales would be treated. It seems, however, that the SEC has adopted a position - at least it did with ether - that sales at one point may have been sales of investment contracts violating securities laws, but that once the underlying platform or network has been up and running for some time that it no longer is. But I am not sure about this. I would think Ripple wants to frame a settlement such as "ok, we'll pay a fine for some of those early sales, but at some point xrp became a non-security like ether (given its utility, ubiquity, etc), and as a result future sales are not sales of securities." It also remains to be seen how xrp (if sold as a registered security and only to accredited investors) would convert as some point to a non-security. But even if Ripple had to sell only to accredited investors going forward (who have to then hold it for 6 months or 1 year depending on the circumstances and may have some restrictions on selling), it wouldn't be the end of the world. More importantly (for us), all the xrp trading in the secondary market would almost certainly be considered non-securities transactions. I thought I read that Ripple was planning to file its motion for summary judgment on the issue of fair notice first, but I could easily be wrong about that. Any idea whether Ripple's fair notice defense is a question of law for the court vs a question of fact for the jury? Seems like a new "Ripple Rule" should be created by Congress, not by the blunt sword of the SEC through enforcement actions, which is an obviously horrible way to do it.
  9. Those brackets are used when changing the capitalization from the original quote or changing it for some grammatical reason. They are always used when quoting from another source. So, for example, if the original quote (usually from another court decision) being cited to the court was the end part of a sentence, but that section of the original quote is now being used as the beginning of a sentence in the current quote, then brackets are used around the first letter of the first word. "[H]opefully, that makes sense." But I also noticed that there was a lot of that in this last letter.
  10. I'm an attorney, but practice exclusively in arbitration, and not in court where the discovery rules are different - so I don't have experience with how a court would deal with this type of extension request. That being said, yes, I think the judge could grant part of the extension request, for 30 days for example. This is a big case, and the judge will want to allow the parties to be able to develop the record as is reasonable to support their arguments. Sixty days is not that big of a deal IMO given how long some of these cases can drag on. Ripple was naturally going to oppose the SEC's request, but it won't be too surprising if the court grants this one.
  11. The court wants the parties to have the relevant documents and information so that they can present their full case and arguments. The court won't allow overly broad discovery and won't allow repeated excuses about needing more time. Balancing everything, I think the court will likely grant this extension, but it's not a slam dunk for the SEC either. In any event, this particular motion is not that significant in the big picture.
  12. LOL, right? My feeling exactly. Welcome to the year 2021.
  13. SEC gets hammered again. Great sur-reply, assuming the court accepts it. It shows that all the 70+ SEC cases that the SEC claims put Ripple (and the market) on notice about xrp being a security are, in fact, not similar to the SEC's case against Ripple at all. https://www.dropbox.com/s/2t5eklhlqa7lnkd/US_DIS_NYSD_1_20cv10832_LETTER_MOTION_for_Leave_to_File_Sur_Reply_in_Oppos.pdf?dl=0
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