SEC Statement on Crypto - 11.16.18

[Guest]

Here's the link to it.

https://www.sec.gov/news/public-statement/digital-asset-securites-issuuance-and-trading

I deduced from this, that they're giving the opportunity for what would be "noncompliant" to the opportunity to rectify.

Also, you'll be able to file claims for money lost in ICOs (doesn't mean you'll get it)

All in all, I take this as a path to regulatory certainty in the US

[ADingoAteMyXRP]

"We wish to emphasize, however, that market participants must still adhere to our well-established and well-functioning federal securities law framework when dealing with technological innovations, regardless of whether the securities are issued in certificated form or using new technologies, such as blockchain."

So... they're not going to provide clarity. Pass the buck, I suppose. This is sort of infuriating.

[conoroh]

Note how they refer to crypto as 'Digital Assets' now ...

[Asen4XRP]

I see it this way, especially the last paragraph:

Quote

The Divisions encourage and support innovation and the application of beneficial technologies in our securities markets. However, the Divisions recommend that those employing new technologies consult with legal counsel concerning the application of the federal securities laws and contact Commission staff, as necessary, for assistance.

It basically says, hey banks/FIs, wanna use cryptos but have doubts, then come to us. And guess what xRapid already has US customers, pretty sure they contacted SEC and got the green signal, or else SEC would have put an end it it by now.

[KarmaCoverage]

Quote

Broadly speaking, the issues raised in these actions fall into three categories: (1) initial offers and sales of digital asset securities (including those issued in initial coin offerings ("ICOs")); (2) investment vehicles investing in digital asset securities and those who advise others about investing in these securities; and (3) secondary market trading of digital asset securities. Below, we provide the Divisions' views on these issues. 

Ok, so #3 "secondary market Trading of digital asset securities"...

Quote

 

A platform that offers trading in digital asset securities and operates as an "exchange" (as defined by the federal securities laws) must register with the Commission as a national securities exchange or be exempt from registration....

...Any entity[14]that provides a marketplace for bringing together buyers and sellers of securities, regardless of the applied technology, must determine whether its activities meet the definition of an exchange under the federal securities laws. Exchange Act Rule 3b-16 provides a functional test to assess whether an entity meets the definition of an exchange under Section 3(a)(1) of the Exchange Act.

 

Exchange Act Rule 3b-16... https://www.sec.gov/rules/final/34-40760.txt

Quote

 

The statutory definition of "exchange" includes a "market place or facilities for bringing together purchasers and sellers of securities or for otherwise performing with respect to securities the functions commonly performed by a stock exchange."[21] In response to commenters’ concerns and suggestions, the Commission has carefully revised Rule 3b-16 to define these terms to mean any organization, association, or group of persons that:

• (1) brings together the orders of multiple buyers and sellers; and
• (2) uses established, non-discretionary methods (whether by providing a trading facility or by setting rules) {Such as Pathfinding} under which such orders interact with each other, and the buyers and sellers entering such orders agree to the terms of a trade.[22]

Rule 3b-16 explicitly excludes those systems that the Commission believes perform only traditional broker-dealer activities. The Commission modified these exclusions to address issues raised by commenters. Rule 3b-16 now expressly excludes the following systems from the revised interpretation of "exchange":

• (1) systems that merely route orders to other facilities for execution;
• (2) systems operated by a single registered market maker to display its own bids and offers and the limit orders of its customers, and to execute trades against such orders; and
• (3) systems that allow persons to enter orders for execution against the bids and offers of a single dealer.[23]

 

So my take away is that XRPledger is an exchange...?

[flanman]

This is great news, and is what I expected. Ripple has become too powerful to take down, so they'll make a few concessions instead.

Edited November 17, 2018 by flanman

[SquaryBone]

This is great news, and is what I expected. Ripple has become too powerful to take down, so they'll make a few concessions instead.

Where passage says that? Or how do you come to that conclusion?

[titi2018]

doesn't look like a good news, "The head of the SEC’s new cyber unit has followed with a warning that decentralized exchanges must be compliant as well, adding that creators will be held responsible."

https://bitcoinist.com/decentralized-exchanges-cant-escape-the-sec-warns-its-cyber-chief/

 

Edited November 17, 2018 by titi2018

[KarmaCoverage]

53 minutes ago, titi2018 said:

doesn't look like a good news, "The head of the SEC’s new cyber unit has followed with a warning that decentralized exchanges must be compliant as well, adding that creators will be held responsible."

https://bitcoinist.com/decentralized-exchanges-cant-escape-the-sec-warns-its-cyber-chief/

 

Remember Ripple was already fined $750k, and forced to shutdown RippleTrade thereby ceasing to host consumer level exchanges services.

I have a feeling Ripple will be just fine, but How that will technically be accomplished I'm curious about.

[Guest]

It actually sounds really positive. They’re basically saying hey if you don’t try to **** around and **** investors, we’ll help you out just come to us. 

 

If if you don’t think Ripple has been in talks with the SEC for quite some time now...

[Agrilax]

I know this is an XRP forum, but I do have serious questions about how all this sounds for Stellar...

 

They have an SDEX (unlike Ether, which we know has been said is probably not a security), where you can actually buy/sell XLM for other ICO's which may/may not be securities...

 

[KarmaCoverage]

2 minutes ago, Agrilax said:

I know this is an XRP forum, but I do have serious questions about how all this sounds for Stellar...

They have an SDEX (unlike Ether, which we know has been said is probably not a security), where you can actually buy/sell XLM for other ICO's which may/may not be securities...

Do they host a consumer facing service to trade on their ledger? If so, do they require KYC/AML compliance?

Didn't IBM get themselves caught up in Stellar? You would think they would have enough sense to focus on compliance issues.

[Agrilax]

I was of the impression that IBM built a cross-border money transfer service that can use digital currencies for settlement purposes, with Stellar being the default digital asset. However, other digital assets can be used for settlement (I don't follow Stellar too closely, but form memory this was the state of play, someone correct me if wrong). I would imagine liquidity will be important in destination corridor when choosing which asset is used for settlement by customers if this platform starts gaining any traction. At the moment XRP is miles ahead on the liquidity front, of course things can change quickly.

[DannyRipple]

It’s time

[Mcripple]

6 hours ago, DannyRipple said:

It’s time

For what