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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 f

I filled out the form on their website to ask an investor education question and they responded, I won't offer any opinion or analysis, I'll just share the response.  

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,

14 minutes ago, dreamsofpolyphemus said:

One thing I’ve wondered about is this... would XRP still be able to function as intended for its use case if it is deemed a security? How would it’s status as a security affect it’s liquidity and function as a bridge currency? 

Well Ripple's intention is for xRapid to source directly from the open market (i.e. exchanges).  Being labeled a security means all of those exchanges have to go and seek a securities license and jump through all the regulatory hurdles so that they can legally offer XRP as a legal trade-able asset.  So IMHO short term it would be devastating to the development of xRapid usage/adoption, but long term it might open some pretty big doors since you'd basically see XRP get listed on the NASDAQ and other major stock exchanges around the world.  It also probably would get the benefit of 401k-like investment products quicker than getting a non-security status.

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4 hours ago, Fazzyfocus 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. 

 

Awesomely written.

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3 hours ago, ImTheRippler said:

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

This isnt their entire definition of a security though. Im actually not sure this is what the community or ripple should be emphasizing. What you are basically saying is xrp gives you no claim to the company assets which is the only meager protection shareholders have after the chain of creditor seniority has been paid off in case the company goes under.

 

In other words, "xrp aren't shares! It could go to 0 and the company has no obligation to reimburse is anything!"  Thats not the message you want your argument to hinge on in a regime established for the sole purpose of non-sophisticated investor protection.

As the other guy said, the courts will have the last word on this regardless of what the SEC says and the SEC probably won't say anything while the lawsuit is ongoing. And plaintiffs requested a jury trial. That means anything can happen - once the court system starts it's literally alice in wonderland and no one can predict the outcome.

Edit: the FINRA factoid thats been raised may be very persuasive evidence, probably confuse the court who will punt the issue and dismiss the case without prejudice pending legistlative clarity. Actually Im about 99% sure that will happen. 

 

Edited by Konan45
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35 minutes ago, Konan45 said:

What you are basically saying is xrp gives you no claim to the company assets

Thats exactly it, we as XRP holders DON'T have claim to Ripple's assets.  The value of XRP will rise and fall according to the utility provided by its unique properties as a Digital Asset, not according to the value of Ripple the company. 

Just like oil is acquired and refined by companies (who invent technology to do so) to grow their company and is then sold and used by other companies (who invent technology to do so) for its special properties doesn't mean its a security for the company who acquires it OR the company who later uses its beneficial properties to make a business work.

Edited by ImTheRippler
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Not financial advice, just my opinion:

Anyway, I still have trouble reading that e-mail.

Hypothetically speaking, if Ripple forsees that the SEC will likely designate XRP a security, one way for Ripple to counteract, minimize, cancel or even improve upon XRP's value even after the SEC or the court has declare XRP a security is for Ripple to make a statement that they will take the company public.

 

Edited by enrique11
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3 hours ago, enrique11 said:

I think they are...already some American have crypto tax liabilities that can't be met because of the loophole closing..and they are in financial trouble.

I would have done the law in such a way that when you are done trading cryptos and either cash out in fiat or buy something (other than a crypto) with crypto, then you pay taxes on it...in other words, I would have allowed the loophole to be applied to help this tech take off in the U.S., to make it a leader...by making investors potentially pay taxes every year, the government is unleveraging their investors' investments, and worse, ruining their investments if there are market crashes and tax liabilities can't be met.

The end result in terms of the amount of taxes paid by citizens is the same...and you don't burden citizens with keeping insane tracking of crypto values every time you trade.

I put the impetus on the individual in this situation to have sought out the proper knowledge of tax liability. The IRS has had on their website since 2014 a fairly clear explanation of their perspective. The 1031 exchange recommendation has always been, in my opinion, questionable advice at best, given the IRS’ guidance since 2014.

I understand what you’re saying, but also don’t have a lot of remorse for someone who should really take responsibility for what it is that they’re doing.

The government doesn’t exist to save people from themselves.

Edited by Hodlezerper
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8 hours ago, Mr_McFearson said:

It is right in front of your face!

 

THEY ARE NOT A SECURITY.

No, that's not it...it just means that Ripple hasn't registered with the SEC - that's all.

It's a new asset class with qualities of various traditional asset classes. Why would Ripple go out of it's way to help the SEC at Ripple's own expense if it's not warranted yet and Ripple has adamantly claimed that XRP is not a security?

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6 hours ago, ResidentNerd said:

This. If you can read between the lines, its right there in the email. 

Not financial advice, just my opinion:

lol...I haven't read the e-mail entirely...too small font, but I have read a few parts of it...and I only see one part that matters to me and then I stopped paying that much attention to the rest of the letter:

The SEC said they were a federal regulator and cannot give legal advice / clarification, so anything to the contrary contained in that letter as to what the SEC legally deems XRP would not be stated explicitly or otherwise...the reader IMO would have to make assumptions unless the the SEC responder in the e-mail had some kind of insight and screwed up royally by revealing stuff, which is probably why the commission I would assume (the top guys at SEC) would keep quiet about any particular cryptos and just make general blanket guidelines for all cryptos instead that don't neatly fall into a pure crypto category like BTC, ETH.

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18 hours ago, dadofzara said:

My view - SEC will clear XRP before the end of the year and actually focus on bogus ICO's and scammy projects.

Not financial advice, just my opinion.

Agreed, but the SEC stills needs to dissuade companies from circumventing the securities (raising capital) issue via a similar loophole to Ripple's situation.  Ripple is the first company being tested in this capacity by the SEC,so I'm hoping they will let it slide for Ripple and similarly established cryptos, like they let the early ICOs slide by without legal consequences.  Fine Ripple at worst or the courts fine them, etc. if necessary and then the SEC makes a formal annoucement on the subject as a warning to others to not raise capital that way...in other words, companies should go ICO route with SEC and not do a "Ripple", and then the SEC should give Ripple the opportunity and time to evolve and distance themselves from XRP sufficiently if possible for a non-securities status.

Edited by enrique11
emphasize info by highlighting it
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