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SEC chairman on cryptocurrencies

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12 minutes ago, GalaxyRipple said:

But surely you understand the benefits of having a former SEC chair on board. 

Of course, but only to the extent that it relates to that particular case... As an investor. that case has limited bearing on my crypto investments, as the SEC has ultimate authority on this issue.  You could take it to the Supreme Court, but only a few have won against the SEC from my understanding.  Federal agencies have very deep pockets. ;) it would be quite an expensive endeavor as an individual investor.

Edited by enrique11

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2 minutes ago, enrique11 said:

Of course, but only to the extent that it relates to that particular case... As an investor. that case has limited bearing on my crypto investments, as the SEC has ultimate authority on this issue.

If you are trapped in a building it’s best have someone who knows where the back door might be ;)

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20 minutes ago, GalaxyRipple said:

If you are trapped in a building it’s best have someone who knows where the back door might be ;)

I'm starting to believe John McAfee... That the "elite" don't like the idea at all of cryptos usurping their financial and political influence and power... Some days it really seems like that... Think about it... How helpful has our government been in trying to help grow the space?

Ultimately it could pose a risk to central banks' monetary policies and by extension our economy... so better to play it safe than sorry they might be thinking.

I like Ronald Reagan's view of government's view of things..."If It moves, tax it.. if it still keeps moving, regulate it... and if it stops moving, subsidize it"... - that basically summarizes centralized government control of things.

Edited by enrique11

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I never once derived from what Clayton said, that XRP would be classified as a security.  Seems like most others here in this thread did.  What did I miss?  If anything seems like he rode the fence all the way through the interview and basically said nothing except obvious ICO stuff.

 

Next, if XRP were classified as a security how/why would that be a bad thing?

 

Finally, if it were classified as a security how would that affect our ownership of it? 

Edited by xrphilosophy
sp.

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44 minutes ago, LordAMV said:

Is it at all relevant that he explicitly stated that bitcoin (or any other crypto that acts as a currency) is not a security?  He seems to be focusing on tokens, which would make me think that pretty much the entire ERC20 platform is liable to be named a security, even though he goes on to state that this all seems to hinge on 'getting a return', which none of these coins or tokens do as far as I know...

This all seems clear as mud...

Yeah, Bitcoin is not a security overall because the key differences are you're providing a service (Bitcoin network security) and in a manner getting paid for that service it's not an investment with expected returns, it's more of a job and getting paid for that job as a miner, and there is no single company behind Bitcoin that creates all the crypto out of thin air ("pre-mine") -they had to work like all the miners or buy it on the secondary Market - that makes all the money and uses it for funding. These key differences separate Bitcoin from a crypto like XRP or OMG with a single company entirely behind them that "issues and sells stock" to investors and takes the investors money for funding, even if that "stock" has smart contract capabilities or has currency-bridging capabilities as its primary function IMO.

Edited by enrique11

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You can really see this delineation if you look at American exchanges like Coinbase and Gemini and compare them to other exchanges like binance and upbit in terms of what cryptos are traded... The SEC has really limited us to the most decentralized and slowest or sluggish cryptos with no hint of traditional centralized for-profit authority behind these cryptos. That's why if the SEC decided to play hardball I was seriously considering going all-in cryptos and get out of Fiat entirely eventually as much as possible.

Edited by enrique11

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24 minutes ago, xrphilosophy said:

I never once derived from what Clayton said, that XRP would be classified as a security.  Seems like most others here in this thread did.  What did I miss?  If anything seems like he rode the fence all the way through the interview and basically said nothing except obvious ICO stuff.

Agreed and there is no way Ripple is in the dark on this.  They have connections & contact with regulators.  I wouldn't be surprised if Ripple's decentralization efforts were in part prompted by regulator input.  And Brad the Beard is one of the most vocal supporters of said regulators.  SEC will continue to focus on the real bad actors - ICO scams and manipulated exchanges.

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2 minutes ago, PG1 said:

Agreed and there is no way Ripple is in the dark on this.  They have connections & contact with regulators.  I wouldn't be surprised if Ripple's decentralization efforts were in part prompted by regulator input.  And Brad the Beard is one of the most vocal supporters of said regulators.  SEC will continue to focus on the real bad actors - ICO scams and manipulated exchanges.

Yes Ripple is very powerful financially also because they're helping Banks and banks are very powerful. We shall see if they'll look the other way like they did for the DAO ICO, but in the latter case there was no presidence, so it was like a freebie warning that just about all ico's are securities and to stop participating in them or on the other end stop offering them to investors without registering them first with the SEC or getting an exemption.

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2 hours ago, PG1 said:

I think the SECs main focus is on ICOs where their funding comes solely from token sales.  Ripple has private shares & was venture funded.

And do we think a former SEC chair would agree to represent Ripple in a law suit if they weren't ultra-confident XRP is not a security.

Yeah, initially it was, but then they went after exchanges, and now the "coup de gras", the cryptos themselves... I still haven't seen the video, but...I've always had the feeling they would go after cryptos from what I've read about them since I first heard about securities and trying to figure out what they were. I think the howey test is deliberately vague/general so it gives the SEC a lot of freedom/flexibility/power to decide what is and what isn't a security.

Edited by enrique11

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I can use XRP to buy land, rent a plane and so on. XRP is clearly a fiat alternative like BTC. 

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21 minutes ago, Coretex said:

I can use XRP to buy land, rent a plane and so on. XRP is clearly a fiat alternative like BTC. 

I think it's a hybrid of a security, fiat, utility token and perhaps more. It's still somewhat the wild west, and it will be interesting to see how it plays out. Still, the bottom line is that it has real value—and a lot of it—regardless of how it ends up being regulated. Its value just hasn't been realized yet.

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One of the big cons about cryptos being deemed securities is that they will stifle competition and innovation.  Legacy corporations spend about 8% of revenue annually on compliance, from some article I read.  It's very costly, but corporations deliberately lobby government to keep compliance costs high to keep upstart competition at bay. I remember reading that just registering with the SEC as a security costs several million annually (If I recall correctly, some article I read said between 1 to 7 million USD another said 3.5, which is the average of the two extremes).  A number of startups will not be able to comply with regulations and will fall by the wayside.  It's good and bad.  Get rid of a lot of sh*tty coins, but it will take down some (a lot?) low coins with good ideas and poor funding.

Edited by enrique11

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