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SEC Responded to me

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My government, the US government, probably like 99% of other governments out there, surely make it easy for themselves, particularly their regulatory agencies, like the IRS, SEC, etc., and very difficult for its citizens...the current Trump administration closed a real property loophole that could have been applied to cryptos that would have allowed you to defer taxation on cryptos until you cash out in fiat...they did this by declaring all cryptos 'virtual property' at the beginning of this tax year, and that is applied and enforced retroactively...so some citizens have tax liabilities for 2018 accumulated retroactively that they can't possibly pay off because of the crypto market crash at the beginning of this year.   I don't see the SEC any differently, but it would be monumentally idiotic of the SEC to give the OK to BTC and ETH and say no to XRP and XLM, have the latter two "die off" marketcap wise and in the subsequent course of that decision as a consequence of global adoption of BTC and ETH, the first two pure cryptos in terms of marketcap start posing a risk to US monetary policy...and then they take another drastic measure which makes things convenient for them, but difficult for its citizens that are involved in cryptos.

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That unfortunately I dont know. I wish I did though as I will definitely be watching and waiting for the answer on that case. I am hunting for it and any info would be appreciated.

Lets be honest, in the hands of the court whilst most of us agree that XRP is not a security, behind closed doors and in the American Judicial system... anything is possible. If the first case goes south? I will be selling with a view to take profit and reposition when the price tanks... which it will.

If Ripple win the case? be prepared for a moonshot. the hype and simultaneous FUD around this subject is MASSIVE. It will spark panic buying OR fomo depending on the ruling. guaranteed.

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2 hours ago, Juan27 said:

I'm a little nervous seeing investment CEOs coming out saying XRP is definitely a security. So does the court ruling for the three cases have to place first before the SECs decision or does nobody on this board have a clue?

Not financial advice, just my opinion:

My opinion is subject to change with new info, professional opinions that comes out.

Yes, I've done my own research outside this forum and am still learning about securities.  But currently I've change my opinion from

It is unclear if XRP is a security and it is unlikely if XLM is a security

to

It is likely that XRP is a security and it is unclear if XLM is a security.

We need to watch these cases closely.  If XRP were clearly not a security, they would have already said something by now or soon IMO because XRP so different from BTC and ETH and it is ranked 3rd for marketcap after ETH.

Still, I can't say definitively that it's necessarily bad in the long run if XRP is deemed a security.

Edited by enrique11

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1 minute ago, enrique11 said:

Not financial advice, just my opinion:

My opinion is subject to change with new info, professional opinions that comes out.

Yes, I've done my own research outside this forum and am still learning about securities.  But currently I've change my opinion from

It is unclear if XRP is a security and it is unlikely if XLM is a security

to

It is likely that XRP is a security and it is unclear if XLM is a security.

We need to watch these cases closely.  If XRP were clearly not a security, they would have already said something by now or soon IMO because XRP so different from BTC and ETH and it is ranked 3rd for marketcap after ETH.

Still, I can't say that it's necessarily bad in the long run if XRP is deemed a security.

I think I would lean in this direction but still on the fence as I think the cases could go either way. I would be surprised if there are not back room dealings going on here. 

The classification of this one asset could go as far as creating the ground works for a paradigm shift in the future of world finance. That is something by its nature that is going to **** a LOT of important, wealthy and powerful people off. Dont expect this to be a smooth OR fair fight.

 

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33 minutes ago, fareed said:

That unfortunately I dont know. I wish I did though as I will definitely be watching and waiting for the answer on that case. I am hunting for it and any info would be appreciated.

Lets be honest, in the hands of the court whilst most of us agree that XRP is not a security, behind closed doors and in the American Judicial system... anything is possible. If the first case goes south? I will be selling with a view to take profit and reposition when the price tanks... which it will.

If Ripple win the case? be prepared for a moonshot. the hype and simultaneous FUD around this subject is MASSIVE. It will spark panic buying OR fomo depending on the ruling. guaranteed.

Yes, but what if that approach doesn't work?  Let's say it's deemed a security, you try to sell it quickly and the exchanges have already been given a heads up about what time to shutdown trading in the US? - unlikely, but I'm looking at worst-case scenario. Or, you are able to sell, but when you go to buy on the dip after it has been declared a security...the institutional investors have first dibs since they are already accredited investors and have driven up the price again?

I don't really have a lot of trust for institutions because of their political power via lobbying. Their interests are certainly not aligned with ours, but rather with their shareholders. 

Edited by enrique11

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For my personal circumstance that is not a massive issue. The majority of my holdings are in derivative form for super fast access and bulk cash out. 

Some may see that as a bad thing i.e. non-ownership of the asset but instead contract on value difference. In this scenario though? that plays to my advantage. If it has already been declared a security, in theory that shouldn't make any difference if you are on a derivatives platform as that would just track the value of the asset, not where it can and cant be traded...

I think anyway!

 

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41 minutes ago, fareed said:

Not sure if anyone here HAS spoken to a lawyer/solicitor/barrister on this... but I have. Two in fact. One for the initial advice, the next for a second opinion. Both concurred on the subject in the following general manner:

The current circumstance with regards to XRP in particular is somewhat unique, although there is a pretty much certain process that will likely be followed. Given the outstanding lawsuits with regards to XRP status, that creates a conflict of interest between the SEC and the courts. The SEC cannot oblige the court on a ruling, however they WILL have to abide by a ruling made by the courts. One must remember that SEC are a regulatory body and whilst they can offer guidance and accept an asset as a given type for their purposes and day to day operations, they do NOT have any say over the status of an asset in a court of law. This situation is undersood by both government entities and its likely the SEC will not intervene. This is known as "separation of power".

Given this situation, it is likely the final decision with regards to XRP status will be decided by the first of the three suits which reaches the courts. HOWEVER, as the courts have jurisdiction, they will almost 99% certain take guidance from the SEC along with considering evidence from both parties in consideration before issuing judgement. Their ruling WILL be binding and will have the final say on XRP status. The two cases that follow after the first ruling will almost certainly follow whichever ruling is made in the first as a precedent will have been set by the judge in the first case. 

Now, objectively, if we put the vested interest to one side there ARE elements to XRP which do reflect the definition of a security. There are other elements that do not. There is a third and new element to the equation which is what makes the scenario somewhat unique and that is the "evolution" of an asset. Traditional asset definitions are set in stone as the asset dynamics do not change. Gold will always be gold. It will always be mined, it will always be measured in weight, it will always value purity value etc etc. Blockchain presents a problem in this scenario that is unique due to the potential change and centralisation in ownership over time. I think the majority here would agree that PoW assets in general become more centralised over time due to the ability to purchase hashpower and capitalise therefore taking more ownership over the entirety of an asset over time. Consensus would seem to be the opposite as it becomes less centralised over time, particularly due to the distribution of validation so long as it can be demonstrated that is the case.

Therein lies the conflict. The law is finite. it measures and defines and pigeon holes and boxes a definition of something into a particular description so there is no room for convolution... but when the asset ITSELF is by nature ever evolving (i.e. for want of a better term, convoluting itself)  then I would say the law would find it extremely ill equipped to deal with it. This is what makes the circumstances unique and why the situation is drawing so much scrutiny because frankly... no one knows what to do with it. 

This is a great example of clarity on how the decision will be made.  Thank you for the write up and doing some leg work.  Much appreciated.  The evolving asset is definitely an interesting and unique aspect of this whole situation.

Lets see how it plays out.

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44 minutes ago, fareed said:

I think I would lean in this direction but still on the fence as I think the cases could go either way. I would be surprised if there are not back room dealings going on here. 

The classification of this one asset could go as far as creating the ground works for a paradigm shift in the future of world finance. That is something by its nature that is going to **** a LOT of important, wealthy and powerful people off. Dont expect this to be a smooth OR fair fight.

 

Yes, the US SEC could rush this and screw things up, and some other country could pass the US by by easing regulations.  They need to think carefully about what they are doing, as they might increase the odds of lowering US standing internationally in the long run.

Edited by enrique11

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29 minutes ago, fareed said:

For my personal circumstance that is not a massive issue. The majority of my holdings are in derivative form for super fast access and bulk cash out. 

Some may see that as a bad thing i.e. non-ownership of the asset but instead contract on value difference. In this scenario though? that plays to my advantage. If it has already been declared a security, in theory that shouldn't make any difference if you are on a derivatives platform as that would just track the value of the asset, not where it can and cant be traded...

I think anyway!

 

I didn't know there was a platform for derivative trading on XRP. 

Ok...just reread your comment and saw that you mentioned that you don't own the underlying asset and yet still quick cash out...so now I'm guessing futures contracts on XRP that let you settle in cash ;)

Edited by enrique11
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Ripple is a privately owned company, XRP is not Ripple shares!

I would be completely shocked if SEC somehow broke their entire definition of a security to kneecap a Digital Asset like XRP, it would open them up to millions of lawsuits by changing the clear definition of a security to something nebulous and questionable under the law.

It would be an utter disaster. Which is why it will never happen.

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