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Alluvial

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Everything posted by Alluvial

  1. Everyone is naturally trying to read between the lines about this extension relating to discovery, and it's normal to do that. I am an attorney who litigates, but in arbitration, not court. Keep in mind that this is a huge case involving an extended time period with numerous witnesses and numerous expert witnesses. There is a lot on the line, and the court certainly knows that. The last thing the court wants to do is have either party prejudiced by not being able to reasonably complete discovery, and it certainly does not want a party to be able to argue on appeal that it was prejudiced by not being able to properly complete discovery. So I am not at all surprised by the court granting this extension. All that being said, sometimes what appears to be a ruling against a party is really an insight into how the court might be thinking about the merits of the case. Sometimes, for example, when my firm is litigating a case at the final arbitration hearing, the arbitrators, as the hearing progresses, begin to make rulings that seem to consistently be against our side - such as objections to evidentiary issues all going against us and in the other side's favor. What that often means, however, is that the arbitrators have pretty much decided to rule in favor of our client, and they bend over backwards to allow the other side to present their case fully and in some ways even restrict our side from presenting certain evidence if the other side objects. They do that so that the losing side doesn't have an argument on appeal that the arbitrators were unfair to the losing party, which can cause the final ruling to be vacated. I am not saying that is in play here, but it is possible to small degree. Of course, the judge has not made any final decisions, but she could be leaning. So I take this as an extremely minor positive.
  2. IMO, this request by John Deaton to file a brief regarding discovery deadlines should not have been filed. The court will look at this negatively, and it may, as a result, cause future briefings by Deaton as "friend of the court" to be given slightly less weight and seriousness. I am not surprised at all that the court denied Deaton's request, and I can imagine there was some eye rolling when it was filed - by the court, its legal staff and counsel for both Ripple and the SEC. I know our friend wants to get in there and represent us, and for that we are all very grateful. But this was a somewhat ill-advised move. And our friend Jeremy Hogan, who is close to John Deaton, is trying to be supportive; but my guess is he would not have filed this request. But even so, and all things considered, it's not a really big deal.
  3. No. The xrp holders which are represented by Deaton are limited to what they can file. My understanding is that it will be limited to legal briefs which will involve legal adjudication of the claims - most likely at the summary judgment phase of the case. My original response is above. I should have said he could file a response if the court allows it, but my guess is that the court will not allow it. From my understanding of the motion to extend the deadline, it's not a legal issue. Honestly, I don't think the court will be happy to see this motion as it seems far outside the scope of what the court permitted Deaton to address. Deaton's request to file a response begins and ends with something to the effect of "I hope this doesn't upset the court too much with what I have requested." In my opinion, there may have been a time to play this card (relating to some other motion), but this wasn't it. But he is deeper into this than someone like me who is following it from a distance. We will see.
  4. Really sorry to hear this from a fellow xrp holder. I sincerely hope they are not lost and be recovered. Good luck! I know many on here may not like this suggestion, but I feel keeping xrp on a trusted exchange is the best way to hold xrp. I had a portion of my xrp in a cold wallet which was secured by a secret key which I wrote down and kept in my safe deposit box. When I attempted to make the cold wallet hot by entering the secret key, the secret key did not work. I re-entered it around 15 times. Panic ensued. I eventually considered the possibility that perhaps I had written the secret key down incorrectly, even though I quadruple checked it. Turns out a 0 (zero) was really an o (even though I had explanations on my paper explaining any possible ambiguity in letters and numbers). If it had been some other mistake, I could have lost those xrps forever. From what I have seen, the exchanges now appear to have very good security (I am sure there are exceptions). The hacks are almost always the customer giving information about the account to a scammer, but not always. And hopefully, the days of Mt. Gox, where security for crypto was in its infancy, are gone. Most of the exchanges now even allow for a lock on the account where various steps must be completed for any withdrawal to be made from the account (my understanding is that Coinbase, Kraken and Bitstamp all offer that). I recommend that my fellow xrp brothers and sisters consider using this lock as an additional level of security along with 2FA (always), a good password, and email confirmation where available.
  5. Yes exactly, the way Double G is going, everyone who raised a hand will be receiving a Wells Notice in the very near future!
  6. Great article for us, and the NY Post and Charles Gasparino are big names. Things are looking better for us with each passing day.
  7. Gensler will be on CNBC on Tuesday, August 4 at 8:00 am ET. I'm sure it will be the usual platitudes.
  8. 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. ))
  9. 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?
  10. Do we know which attorney(s) will be deposing Hinman?
  11. Anything that Luke Harding writes can be immediately disregarded. His record is really bad.
  12. 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.
  13. 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.
  14. 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.
  15. 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.
  16. LOL, right? My feeling exactly. Welcome to the year 2021.
  17. 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
  18. Yes, for sure it's cum rocket. How the 3rd richest man in the world (or whatever he is) would use that emoji for "cum" is amazing.
  19. Ok, this is pure speculation and probably means nothing, but I happened to come across Elon Musk's cryptic tweet from a few hours ago. Please correct me if I'm wrong, but is this not a Ripple logo? I know Elon is looking for an environmentally-friendly crypto since he broke up with bitcoin, and had tweeting about dogecoin, but maybe he realizes now that xrp is the best one. Just throwing it out there.
  20. Great video as always, informative and entertaining. Loved the painting of the Howey sign!
  21. I like how Ripple mentioned to the judge one such document that it obtained from an independent source. The SEC document, dated October 2020: “We [the SEC] appreciate the opportunity to review your additional concerns about [XRP]. Please be advised the SEC has not issued a determination on whether the cryptocurrency XRP is a security. . . ." Ouch for the SEC! The SEC knows that there is a lot of good ammunition for Ripple in those documents, and that's why it's slow walking production. The SEC could very well be trying to settle this case now to forego production of those documents. Fair notice defense looking stronger every day.
  22. He sells on the ledger on Bitstamp. Look at the big sales that hit everyday. That's him. https://xrpcharts.ripple.com/#/markets/XRP/USD:rvYAfWj5gh67oV6fW32ZzP3Aw4Eubs59B?interval=30m&range=3d&type=line
  23. What you are missing is that the judge made it clear how the court will examine the fair notice defense. The court rejected the subjective standard, which is what the SEC desperately wanted. Instead, Ripple's fair notice defense will be based on an objective test (what Ripple wanted and what it argued for) - what a reasonable person in the marketplace would have concluded regarding the nature of xrp and whether it is a security. Based on everything that the SEC has done and not done over the past nearly 10 years, and all the other factors the court will consider, do you think a reasonable person would conclude that xrp was a security? If not, then the fair notice defense wins. The judge of course will say that it is not making its ruling on the fair notice defense at this time because the court has not been presented with the evidence, but we know knowing how the court will evaluate the defense. Plus, you know those SEC memos, etc that Ripple is going to get in discovery will help its defense as they are going to show that the SEC itself was confused and probably split on whether xrp is a security. IMO this is the best and most important ruling Ripple has received in the entire case.
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