Jump to content

Recommended Posts

We’ve been through this before: the SEC is a regulatory body that enforces the law, not interprets it. There are court actions in play and the SEC would need to await guidance of the court.

The SEC won’t issue a TKJ type letter and Ripple would be suicidal to apply for one on those terms. It’s basically a last ditch attempt to save the farm and may even be more damaging to Ripple than losing the class action.

Ripple has a very long way to go before they need to do something as drastic as that.

I’m happy that they keep plugging away at the court cases. 

Share this post


Link to post
Share on other sites
54 minutes ago, Tinyaccount said:

Oh ok...   it’s clearly become suddenly serious once we start writing in red and underlining.

slap hit GIF by Ovation TV

 

 

12 minutes ago, Pablo said:

We’ve been through this before: the SEC is a regulatory body that enforces the law, not interprets it. There are court actions in play and the SEC would need to await guidance of the court.

The SEC won’t issue a TKJ type letter and Ripple would be suicidal to apply for one on those terms. It’s basically a last ditch attempt to save the farm and may even be more damaging to Ripple than losing the class action.

Ripple has a very long way to go before they need to do something as drastic as that.

I’m happy that they keep plugging away at the court cases. 

RIPPLE  claims not to be a security, but they are clearly a security under the investment contract, risk capital and the TKJ tests.

Ripple continues to put XRP into the market with the false claim that it is not a security.

Lots of us have relied upon those false  assertions in acquiring XRP. 

Ripple owes it to everyone, including the companies actual shareholders to follow the law. 

The SEC has said Bitcoin and Eth were not securities, but it has not opined on XRP. 

SEC interprets securities laws and that is what the TKJ memo is.

The federal courts rely upon those interpretations and the Plaintiff's class action suit will rely upon the SEC position to assert the basis for the Ripple securities violations.   

Ripple is just kicking the can down the road. 

https://www.sec.gov/divisions/corpfin/cfguidance.shtml

Statutes, Rules and Forms

Small Business

Contact Us

Compliance and Disclosure Interpretations

These interpretations reflect the views of the staff of the Division of Corporation Finance. They are not rules, regulations, or statements of the Commission. The Commission has neither approved nor disapproved these interpretations.

These positions do not necessarily discuss all material information necessary to reach the conclusions stated, and they are not binding due to their highly informal nature. Accordingly, these positions are intended as general guidance and should not be relied on as definitive.

The Division currently is in the process of revisiting and refreshing its interpretive positions. The new landing page below re-organizes the topics to assist users in navigating the information. Revised or new interpretations will be published here.

We welcome requests for interpretive advice and other assistance relating to the areas of the federal securities laws that the Division administers and interprets. Please use this form or contact us via telephone.

Share this post


Link to post
Share on other sites

https://www.sec.gov/answers/about-lawsshtml.html

Securities Act of 1933

Often referred to as the "truth in securities" law, the Securities Act of 1933 has two basic objectives:

require that investors receive financial and other significant information concerning securities being offered for public sale; and

prohibit deceit, misrepresentations, and other fraud in the sale of securities.

See the full text of the Securities Act of 1933.

Purpose of Registration

A primary means of accomplishing these goals is the disclosure of important financial information through the registration of securities. This information enables investors, not the government, to make informed judgments about whether to purchase a company's securities. While the SEC requires that the information provided be accurate, it does not guarantee it. Investors who purchase securities and suffer losses have important recovery rights if they can prove that there was incomplete or inaccurate disclosure of important information.

Share this post


Link to post
Share on other sites
51 minutes ago, Sporticus said:

 destroy the remaining tokens

David Schwartz mentioned this was a possibility.

I wonder what the possible outcomes are. It's not as if they can just turn of the XRPL ...

Maybe XRP would increase in price after being ruled a security because Ripple would be forced to destroy coins to make it not so?

Share this post


Link to post
Share on other sites
1 minute ago, elias said:

David Schwartz mentioned this was a possibility.

I wonder what the possible outcomes are. It's not as if they can just turn of the XRPL ...

Maybe XRP would increase in price after being ruled a security because Ripple would be forced to destroy coins to make it not so?

Elias-

I think they need to get out of the token issuance biz.

Of course the price would go up, just like it did when they engineered the pump in December 18 after the lock up. . . 

But they can continue their software approach. 

The TKJ no action letter is game over in the US. 

Share this post


Link to post
Share on other sites
Posted (edited)
9 hours ago, Montoya said:

How exactly would this benefit XRP holders? Wouldn't the easiest way for Ripple to "grow its revenue" be to sell XRP? Isn't it doing that right now? I can see how revenue growth would benefit stock holders, but last I checked, owning XRP doesn't get you any shares. I assume you mean "grow its revenue through selling products not XRP". But here is the thing, perhaps growing revenue in such a manner requires the sale of XRP. This is information to which we are not privy, and why there is a certain amount of gambling involved when buying an asset such as this. We are hoping that Ripple is getting it right, and trying to grow the value of XRP. But it is entirely possible they could be flubbing it badly. One thing that reassures me is that the incentives are aligned correctly. Ripple has a distinct incentive to increase the value of XRP. So, it is likely they would try to do so in the long run. So then we must assume, if Ripple is flubbing it, it would likely be due to incompetence rather than greedily dumping XRP, sacrificing massive future profits for smaller short term gains. Finally, since we are not privy to the internal processes of Ripple, it is impossible for us to know one way or another if Ripple is flubbing it or not. We simply cannot know that because we do not have access to all the info. So then my question is, given our certain absence of knowledge about the full situation, which is more likely: Ripple is flubbing it? Or we simply don't know all the variables as well as we think we do?

I have asked myself the same question if Ripple is flubbing it or are we missing certain information.  A few of the areas I have not been able to comprehend why Ripple has taken these actions:

1. Ripple has a few economic experts on their board of directors. Which they should have extensive knowledge on microeconomics supply and demand.  At this point in time Ripple should have a good understanding of the current XRP demand, as well as high level estimates for future XRP demand (based on upcoming projects being released to the market).  Ripple also has direct knowledge of supply/selling factors for when XRP is being released and sold to the open market. When considering XRP has been in a bear market for 2 years.  They should also have a good understanding of other market conditions that may impact XRP price (BTC crashing, US recession, etc.).

So why are they continuing setting up agreements with organizations to mass sell off XRP to the market that will be locked in for at least a few years?  I would expect economic board of director experts to provide recommendations this is a red flag, that too much XRP is being sold and added to the market. Which is the opposite of Ripple's latest strategy for planning to make several strategic investments and acquisitions.  Do they not see this as a concern? Have their economic advisors voiced this but it is a lower priority compared to other strategies?  Are they just extremely risk tolerant and are trying to go all in? Are they actually trying to lower XRP price further?

2. When considering upcoming legal and regulatory events like lawsuits and SEC guidelines, why are they taking over the top frivolous actions for having XRP sold on the open market (others have noted examples)? Not all of these scenarios have Ripple directly selling XRP, but they all track back to Ripple agreements. Including Ripple and the partner organizations directly cashing out for fiat.

Do they believe over the top frivolous actions for selling XRP will have no impact on the upcoming legal and regulatory events?  Did they not realize this until recently (which many of the business deals were in final stages)?  They did make a note on closer reviewing their sales in their Q2 2019 market report, so maybe they overlooked this in the past?  Or maybe they perceive cashing out of XRP a higher priority than impacts to the upcoming legal and regulatory events?  The upcoming lawsuits are directly referring to these examples in the filings. For example one of the lawsuit filings directly quoted every social media comment from Ripple employees that could be used against them.  Which explains why we have seen the cut back on Ripple employees commenting on social media.  

 

Edited by wogojump

Share this post


Link to post
Share on other sites
22 minutes ago, wogojump said:

Ripple has previously stated their goal is to stabilize XRP prices, in order to get institutional buy-in.

I doubt that.  I’ve never seen them say that.  Do you have an instance?

Share this post


Link to post
Share on other sites
Posted (edited)

@Sporticus you are throwing out statements about legal ‘facts’ as though they are unarguable,  and yet your whole profession is all about arguing multiple sides of an issue.

Can you please try and rein in the tendency to state ‘facts’ without mentioning that they are,  in fact,  just your opinion?  

Because you clearly have some professional knowledge here,  the people reading your posts might just take your word as law when in fact it isn’t.  

Just one of many examples:

1 hour ago, Sporticus said:

RIPPLE  claims not to be a security, but they are clearly a security under the investment contract, risk capital and the TKJ tests.

 

 

Edited by Tinyaccount
Replaced ‘reign’ with ‘rein’. Oops.

Share this post


Link to post
Share on other sites
1 minute ago, Tinyaccount said:

@Sporticus you are throwing out statements about legal ‘facts’ as though they are unarguable,  and yet your whole profession is all about arguing multiple sides of an issue.

Can you please try and reign in the tendency to state ‘facts’ without mentioning that they are,  in fact,  just your opinion?  

Because you clearly have some professional knowledge here,  the people reading your posts might just take your word as law when in fact it isn’t.  

Just one of many examples:

 

I do not argue the other side when I view that the other side is a fraudulent misrepresentation. 

Personally, I  only argue an indefensible position if I am paid.  This  is pro bono and is not a professional opinion, but is an expression of my personal views.

My personal opinion is based upon the ability to read and   citing the relevant language of the SEC TKJ  no action letter and simply substituting the words XRP and Ripple, for token and TKJ.

I came to this  opinion after researching the changing law and regulations and interpretations  for the past two years and  applying for a no action letter in early April. This application is  in  a state where they used the risk capital test like California  and they applied the  Turn Key Jet memo to the facts in our case.

Because the TKJ memo came out after our application, I had to supplement and amend twice to allow for the new SEC TKJ  position.  We received the position of the state last week, which we continue to negotiate over and to compromise.

There have been only two no action letters granted in the US last I checked. 

Ripple simply needs to apply for a no action position and stop with their self serving and conclusionary statements that XRP is not a security. 

It is not for them to posit the nature of a security so as to have the public rely upon it to their detriment. Ripple owes a duty to the law,  public and XRP investors to find out the SEC position by applying for an SEC  no action letter. .   

What are they afraid of?

At the very least Garlinghouse and the others should just keep their  traps shut and quit with the securities yammering and hyping the XRP.

So, I kind of understand this, plus I have owned and traded XRP for three years now. 

I do not have a duty to Ripple, I think my duty is to express my conscience and maybe others will examine my views, which could  prevent themselves from being injured by self-serving and inaccurate  securities characterizations and hype made by Ripple and their shrill, shill army.   

This is not legal advice, it's just my opinion. 

Share this post


Link to post
Share on other sites
Posted (edited)
52 minutes ago, Tinyaccount said:

I doubt that.  I’ve never seen them say that.  Do you have an instance?

I thought I read a direct quote on this in the past.  But it looks like my assumptions were based on articles indirectly discussing strategies for price volatility.  A few examples:

1. This was noted on RippleLabs website in 2014 and has been removed since, so this example could very well be an outdated strategy: http://web.archive.org/web/20140625224750/www.ripplelabs.com/xrp-distribution/.

Quote

If we distribute XRP with these goals in mind, over time we expect to see an increase in demand for XRP that more than offsets the additional supply we inject into the market. Said another way, we will engage in distribution strategies that we expect will result in a stable or strengthening XRP exchange rate against other currencies.

2. From my understanding, one of they key goals for pushing for market makers is to increase liquidity and stabilize the price: https://www.ripple.com/insights/the-life-of-a-ripple-market-maker/.

Quote

As such, market makers are a key player within the ecosystem by not only providing liquidity but also helping to keep spreads low, adding utility and reducing cost for entities transacting on the Ripple protocol.

3. Another example, which looks to note expected cost savings, as XRP gains use and volatility decreases: https://www.ripple.com/insights/ripple-and-xrp-can-cut-banks-global-settlement-costs-up-to-60-percent/.

Quote

As a result, respondent banks that use Ripple with XRP as a bridge currency can save up to 42 percent on costs today and up to 60 percent as XRP gains usage and volatility decreases. To accelerate market thickness and reduce volatility for XRP, Ripple will soon introduce an XRP incentive program to algorithmically rebate market makers who provide liquidity through XRP.

4. This article explains further details on their incentive program, which is used to help manage volatility (rather than directly controlling XRP price): https://ripple.com/files/xrp_cost_model_paper.pdf

Quote

An incentive program stimulates XRP adoption in market making by rebating liquidity providers for quoting against XRP in the immediate term, thereby supporting spread reduction over time against a new asset. The incentive serves to offset volatility risk for market makers and provides an algorithmic distribution schedule for XRP. As adoption and use of XRP increases, so does its liquidity and price stability.  

 

So it looks like I am assuming some of these details.  But, Ripple most likely has to limit what they publicly state on this, based on concerns with being accused of price manipulation.

Edited by wogojump

Share this post


Link to post
Share on other sites
Posted (edited)
3 hours ago, Sporticus said:

The bed rock use case and the  whole notion that XRP will replace the $USD and SWIFT is simply not well thought and is ill considered. The way the United States sanctions countries is to deny them access to SWIFT.  

 Ripple never pushed xrp to replace US dollar. What is your basis for saying this non-sense? 

This has been discussed many times in the past  conferences by Brad Garlinghouse. 

And Ripple never “issued” the  token. 

There are few points of error that makes your whole argument sound delusional.  

 

 

 

 

Edited by quan

Share this post


Link to post
Share on other sites
21 minutes ago, wogojump said:

So it looks like I am assuming some of these details.

I’m sorry but we differ completely on this.  To me it looks like you are drawing incorrect conclusions from their statements.

I stand by my belief that they have never said “their goal is to stabilize XRP prices, in order to get institutional buy-in” and that is not only not stated by them,  but is not at all part of their plans and hopes for XRP.

They have certainly said that when volume is higher and markets are liquid,  the spread will reduce and the volatility will also.  That is basic market behaviour and is assumed.  They do not however state that the current liquidity is sufficient, and they don’t state they need stability for adoption and buy in.

It might seem like a minor difference but it actually is quite fundamental.  Under the assumptions you are positing,  they could be quite happy with the current situation (and some here go so far as to suggest they deliberately engineer this situation), whereas I believe they in fact are not at all happy with this current situation and want a significantly higher price.

 

Share this post


Link to post
Share on other sites

Also what TKJ was offering was a token of value like that of an arcade. I think with that in general it is useful to look at use case.

I think you also must look at agenda and complexity of international transfer of multiple currencies. Due to continuous fluctuations within international currencies xrp could not function if pegged to a single currency. In that mindset go ahead a have USD digitalized and get rid of cash. Do not forget that if you peg any coin to a currency as its represented value then you have essentially created another liability. If XRP remains in an open network it allows for dynamic change in accordance to the environment that is functioning in. Anyway long story short you and another buddy are tag teaming with an agenda.  

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×
×
  • Create New...