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Sporticus

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  1. Matters in the law are not always cut and dry. I can see an interesting set of scenarios which flow from the ICO similarities of EOS and Ripple. These are simply my personal views and are not intended as legal advice. The administrative fine EOS paid was to the SEC, which is the agency of the US Gov't having administrative jurisdiction over securities offers (ICO's) like EOS issued. The SEC likewise can bring a party who breaches the securities law into court on either civil or criminal charges, courts are a separate branch of US Gov't apart from executive agencies like the SEC. . EOS avoided all the court action by entering into a consent agreement with the SEC. But no court proceeding determined anything pertaining to EOS, and neither were there any private individuals involved. EOS is still vulnerable to a securities cause of action from anyone damaged by EOS ICO and is amenable to suit on either state or federal causes of action. The SEC administrative action against EOS does not operate to preclude the issue in Court as to any third party private cause of action, nor does it collaterally estop an assertion of a claim based upon a private right being infringed under the securities laws. Both the US Gov't and private individuals can separately avail themselves of the protection provided by the securities laws. Private individuals can likewise assert state claims for violation of state securities laws, separate and apart form any federally based claims. The SEC has not brought any action against Ripple administratively or judicially. The action brought against Ripple is by private individuals seeking a class action damages award for breach of state and federal security laws. Likewise, if there are some individuals who were harmed by EOS securities offering, then they could sue EOS in court just as has been done against Ripple. The fact that EOS has a consent agreement with the SEC could certainly be used against EOS in any subsequent individual party litigation initiated in civil court. The SEC along with the US Dep't of Justice could likewise initiate a criminal proceeding against Ripple separate from the private cause of action. The interesting aspect of all this is that if Ripple were to destroy all remaining XRP and stop issuing XRP to fund its platform and capitalize its operation from the sale of its speculative asset XRP, it would likely be immune from future actions based upon breaching securities laws going forward. But that would not immunize Ripple from any liability for damages incurred up to the date of the XRP destruction. Ripple has enough liquidity in XRP to perform its announced use case. It opens itself to securities liability by its continued sale of XRP. It would surely help the XRP hodler's value and it would be best if Ripple destroyed all remaining XRP. But they are likely too greedy or stupid to do that. I think ultimately Ripple could accrue some hefty liability, which could be erased by reorganization in bankruptcy if the corporation's solvency were threatened. Of course, this would all take a while to play out.
  2. My view, you are basically correct. That is the effect of a securities class action which involves everyone who has sustained a similar loss. The amount of loss to bagholders and those who sold low could exceed the value of Ripple assets. The courts' class action jurisdiction could even extend to exchanges. Of course, Ripple could bankrupt and we would be able to see what would happen to the value of XRP. This would test Garlinghouse's oft repeated hypothetical that, "Ripple could go bankrupt and XRP would continue." The point is, Ripple created these risks by placing XRP into the market and hyping it andperforming all kinds of acts to increae XRPs value. It is too late, Ripple did not fully disclosed the possible risks which are required in a registered securities offering. The fact that the XRP investing public is having to guess about the risks is a problem in itself. The securities laws are there mostly to require issuers to disclose all material risks relating to purchasing their speculative instruments. The term which the SEC uses is information asymmetry.
  3. You have aptly named yourself, Tiny, and your opinions are baseless and foolish. I will not respond to you in future. It is like trying to put lip stick on a pig and then teaching it to sing.
  4. Oil is not a securities instrument and is a commodity. It has a definite functional use case and is consumable. XRP has no intrinsic value and has a minuscule functional use case in relation to the volume exchanged. Howey test is an investment of money in a common enterprise with an expectation of profit derived from the efforts of others. You are obviously not much at rocket surgery, logic or legal reasoning, but this should not be hard for even you to understand : "Tiny Account made an investment of tiny money in XRP with an expectation of a tiny profit derived from the efforts of Ripple."
  5. The judge will most likely hear oral argument if she cares to, otherwise she will take the matter under advisement and rule later. So it will be a while until we know the ruling. This judge is a former public defender and a President Clinton appointee. That means she is a liberal. Most federal judges are former prosecutors and tend to be corporatists. This judge is not likely to favor establishment or big business. The law might seem ancient, but that is what precedent is and precedent or statutes are seldom disturbed. The tech does not really alter the securities nature of the offering. Ripple has a way out in the future. Destroy all the rest of the XRP. At least they quit dumping. Even if they do that, they will still be on the hook for any past securities violations which caused anyone damage. Hinman's "Howey Meets Gary speech which I provided excerpts in its entirety explains how a token can start out as a security token and segue into being considered a .utility token. My view is that Ripple is not there yet, and -WILL NOT BE ABLE TO SHED PAST LIABILITY IN THE COURTS- anyone who bought in the past and sustained a loss has a cause of action. Courts could give a damned about the potential technological benefits. There is simply no defense provided by "this is great tech." If anything, novel tech is a reason for a court to act suspiciously.
  6. The really disturbing issue is that Ripple has been using XRP to finance its operations just like what is done with a security, but the company and its officers persist in trying to misrepresent to the investing public that it is not a security, when they would have been better off to remain silent. It seems though that Ripple needed the money from the sale of XRP to expand their operation and admitting that XRP is a security or seeking a determination of the securities status could have cut in to their profits. Ripple has lulled the investor (like many of you XRP Chatters) into assuming the risk to their investment, if XRP is deemed a security. The value of XRP and Ripple are likely to be greatly reduced if Ripple is determined a security. The likelihood that the judge and jury will apply the securities laws and the Howey test to Ripple's token issuance operation is overwhelmingly likely. ( Howey test requires an investment of money in a common enterprise with an expectation of profit derived from the efforts of others.) I have not seen any valid arguments which would allow Ripple to avoid a securities characterization in a court of law based upon the facts of the Ripple and XRP relationship. I assign the tendency of stupid people to persist in mistaken notions and to try to school informed experts to the Dunning Kruger effect. Coined in 1999, by then-Cornell psychologists David Dunning and Justin Kruger, the eponymous Dunning-Kruger Effect is a cognitive bias whereby people who are incompetent at something are unable to recognize their own incompetence. Oftentimes, the people who benefit most from deluding or conning the ignorant are far from stupid, but are unscrupulous and greedy, and that is why securities laws are in place: to protect stupid people from the greedy and unscrupulous con men.
  7. Much of the material which you refer to as argument, if reliably reported, are admissions of an agent and constitute evidence supporting a violation of the US securities laws. What strikes me about Ripple is that they have been heavy on tech and business types like Schwartz and Garlinghouse, but early on they did not have a sense of the legal significance of what they were doing or how they were operating a new business which retained vestiges of a money services business and a securities exchange offering which they were boldly used to finance their platform and enrich themselves. You see it most problematically when FinCEN caught up with Ripple et al and they were required to enter a consent agreement with a fine or face criminal indictment. BSA and AML are big issues in the money remittance business and with legitimate financial institutions everywhere. A really astonishing naivete' seems to inform any objective viewer of Ripple's actions in the securities and money services business realms from the company's inception. Typically, financial institutions have trained legal counsel as compliance officers calling the shots. Proceeding with Schwartz as the combined PR, IR and compliance guy is hilarious and amateurish, it goes with his unique sense of dress and hair-styling. Garlinghouse is somewhat better in his sartorail discretion, but he inherited a hot mess from Jed McCaleb and Chris Larsen. Below are excerpted references to SEC Director William Hinman, which were remarks in a 2018 speech he gave called "When Howey Met Gary (Plastics)". There is a tendency of the lay person to gloss over the significance of such language, but this is the position of the SEC in the summer of 2018 and since then, the noose around the crypto neck is being pulled tighter. To ignore such language is a good way to get a jail address.
  8. The EFT Act does not control the SEC's determination of the security status of XRP. The SEC and the US District Court are not bound by this federal register citation in relation to a securities characterization. Notwithstanding, a distributed ledger technology asset like XRP can be both a virtual currency and a security.
  9. You try "answering a simple question without dissembling." You have not responded to the issues which I have posed.
  10. These are the questions you have been asked to justify, answer and/or prove. The failure to answer on an issue relevant to the truthfulness or falsity of a position is an admission. Neither you or Ripple in their response did not explain why they are not a security by addressing the relevant case law, they have not sought a no action position, and nor have addressed Howey, Turnkey Jet or Pocketful of Quarters.
  11. XRP is not legal tender or a currency in the sense of a dollar or a pound. The refernces are made to a "virtual currency"or a "digital currency. For Ripple to assert that XRP is a currency is disingenuous at best and looks like another fraudulent assertion. Here is the Fin Cen statement to substantiate this position that Ripple is not regarded as a currency, rather it is regarded as a virtual currency or a digital currency or a cryptocurrency by this regulator. Nowhere is there a rendering of any decision that it is not a security. Moreover, FinCEN does not have jurisdiction to determine the regulation of securities.
  12. You are consistently a Ripple shill and have no objectivity or understanding of what the subject matter of securities characterization as applied to Ripple are about. You profess to know so much then tell us why Ripple has not done what Turnkey Jet and Pocketful of Quarters id in obtaining a no action position. Also, prove it where the United States regulators have said that XRP is a "currency" and not a security. Also explain why if Ripple and XRP are not securities, why hasn't Ripple obtained an SEC no action letter. A no action letter would put the issue of the SEC characterization of XRP to rest.
  13. The conclusion which Ripple makes that XRP is not a security is not supported by an examination of Howey or the no action positions of the SEC which I linked. Neither is the logic of securities law as applied to crypto discussions made by Director Hinman addressed which I likewise linked. https://fortune.com/2019/09/20/ripple-xrp-securities-lawsuit/ The Fortune article I quoted above and re-quote comes to the same point I have. Ripple does not respond on the merits under relevant law (Howey) why XRP is not a security. It asks us to assume that XRP is a security and therefore is exempt based upon the statute of repose. Which is a bogus argument. It is like Ripple is saying "I ***** a woman three years ago and she did not report me, so after three years, I can go **** another woman and that is alright.and I should not be prosecuted" Dumb defense and not supported. The refusal on the part of Ripple to discuss the relevant law and differentiate itself from the current positions of the SEC is a concession to the fact that XRP is a security. The FinCEN consent agreement is quoted above too and no SEC or FIN Cen regulator have said that XRP is a "currency" and not a security. Really crappy lawyering and your lawyering abilities are nonexistent.
  14. " Based on his allegations, Plaintiff’s federal securities claims are barred by Section 13’s statute of repose, which strictly forbids claims brought “more than three years after the security was bona fide offered to the public.”
  15. https://fortune.com/2019/09/20/ripple-xrp-securities-lawsuit/ https://www.coindesk.com/ripple-files-last-bid-to-dismiss-xrp-securities-lawsuit-before-court-meeting So, Ripple concedes arguendo, that XRP is a security, but tries to shield itself behind the statute of repose. In order to use the statue of repose concerning securities, Ripple assumes XRP is a security, Ripple alleges the statute gives a time bar defense to one who issues a security. The Plaintiff asserts that the time runs from the last issuance of the security.
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