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is XRP's strength clarity of global regulations?


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In seeking to dismiss the complaint, Ripple touches on the legal classification of XRP only briefly, stating federal regulators have concluded that it is a currency and a commodity rather than a security.

Instead, Ripple's primary argument is that the case can't go forward because it was filed too late. The company invokes a law that shields companies from lawsuits related to the sale of unregistered securities once three years has passed.

 

https://fortune.com/2019/09/20/ripple-xrp-securities-lawsuit/

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" Based on his allegations, Plaintiff’s federal securities claims are barred by Section 13’s statute of repose, which strictly forbids claims brought “more than three years after the security was bona fide offered to the public.

 

https://www.coindesk.com/ripple-files-last-bid-to-dismiss-xrp-securities-lawsuit-before-court-meeting

 

So, Ripple concedes arguendo, that XRP is a security, but tries to shield itself behind the statute of repose. In order to use the statue of repose concerning securities, Ripple assumes XRP is a security, Ripple alleges the statute gives a time bar defense to one who issues a security. The Plaintiff asserts that the time runs from the last issuance of the security. 

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1 hour ago, Sporticus said:

https://fortune.com/2019/09/20/ripple-xrp-securities-lawsuit/

 

https://www.coindesk.com/ripple-files-last-bid-to-dismiss-xrp-securities-lawsuit-before-court-meeting

 

So, Ripple concedes arguendo, that XRP is a security, but tries to shield itself behind the statute of repose. In order to use the statue of repose concerning securities, Ripple assumes XRP is a security, Ripple alleges the statute gives a time bar defense to one who issues a security. The Plaintiff asserts that the time runs from the last issuance of the security. 

This is simply false, and to support my argument, I quote Ripple's reply to Plaintiff's response (page 1):

https://www.scribd.com/document/438446249/Ripple-Reply-to-Response

"Opp. 1. XRP is not a security, Mot. 21 n.19, but that is irrelevant for purposes of this motion. Even if XRP were a security, Plaintiff’s claims still fail as a matter of law."

Ripple is opposing Plaintiff's arguments even in the case XRP was a security, but are clearly repeating their position that XRP is not a security.

 

EDIT: I read your post again, and indeed, you actually agree with this yourself. As you wrote, arguendo, for the sake of the argument, Ripple states that even if XRP was a security, the Plaintiff's claims do not hold. This is not the same as them stating XRP is a security, as you state in your post:

10 hours ago, Sporticus said:

Ripple has a horrible record of regulatory non-compliance and even admitted that XRP is a security in its most recent court filings.   

 

Please, support your argument with a quote where Ripple admits that XRP is a security. That statement is absent in most recent court filings, but I was able to find a quote from Ripple explicitly saying it is not a security from the same court filings you supposedly cite.

Edited by QWE
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9 hours ago, Tinyaccount said:

I suspect what you are (perhaps deliberately) misunderstanding is a legal argument along the lines of “and even if XRP was a security this action was improperly filed”.

Yeah. The part where Ripple said in the case (not exact words): you did not bought your "securities" from us. E.g. I claim an egg is made of gold and I sell it to you for 10k and you complain to the "egg factory" that it's not gold while someone else claimed it was. I generally try to keep it in the middle to keep an open mind but this...

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4 hours ago, QWE said:

This is simply false, and to support my argument, I quote Ripple's reply to Plaintiff's response (page 1):

https://www.scribd.com/document/438446249/Ripple-Reply-to-Response

"Opp. 1. XRP is not a security, Mot. 21 n.19, but that is irrelevant for purposes of this motion. Even if XRP were a security, Plaintiff’s claims still fail as a matter of law."

Ripple is opposing Plaintiff's arguments even in the case XRP was a security, but are clearly repeating their position that XRP is not a security.

 

EDIT: I read your post again, and indeed, you actually agree with this yourself. As you wrote, arguendo, for the sake of the argument, Ripple states that even if XRP was a security, the Plaintiff's claims do not hold. This is not the same as them stating XRP is a security, as you state in your post:

 

Please, support your argument with a quote where Ripple admits that XRP is a security. That statement is absent in most recent court filings, but I was able to find a quote from Ripple explicitly saying it is not a security from the same court filings you supposedly cite.

" Based on his allegations, Plaintiff’s federal securities claims are barred by Section 13’s statute of repose, which strictly forbids claims brought “more than three years after the security was bona fide offered to the public.”

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14 minutes ago, Sporticus said:

" Based on his allegations, Plaintiff’s federal securities claims are barred by Section 13’s statute of repose, which strictly forbids claims brought “more than three years after the security was bona fide offered to the public.”

You're kidding, right? The part that you quoted was made arguendo, stating that even if XRP were a security, it would already be too late to file the case. You yourself admitted the statement was made arguendo, or would you like to change your position on that? Just so I know which part to address. And please note, as I quoted from the filings, Ripple specifically stated XRP is not a security. Or are you saying Ripple is contradicting its own statements?

A simple quote from wikipedia for anyone following this debate:

"A criminal defense attorney may say, "if, arguendo, my client stole the internet data and password, then saving a life would have justified stealing it," thus suggesting that determining the client's guilt or innocence is pointless because they would cause identical legal effects."

This is exactly what Ripple is saying (among other things) in that response. The debate on XRP being a security is pointless for this case, because the legal effects for the Plaintiff would be identical either way.

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This guy is either not what he claims,  or is so invested in finding Ripple a security that he is willing to lie about his understanding.

There are only those two possibilities since it’s perfectly clear his claim was false.

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1 minute ago, QWE said:

You're kidding, right? The part that you quoted was made arguendo, stating that even if XRP were a security, it would already be too late to file the case. You yourself admitted the statement was made arguendo, or would you like to change your position on that? Just so I know which part to address. And please note, as I quoted from the filings, Ripple specifically stated XRP is not a security. Or are you saying Ripple is contradicting its own statements?

A simple quote from wikipedia for anyone following this debate:

"A criminal defense attorney may say, "if, arguendo, my client stole the internet data and password, then saving a life would have justified stealing it," thus suggesting that determining the client's guilt or innocence is pointless because they would cause identical legal effects."

This is exactly what Ripple is saying (among other things) in that response. The debate on XRP being a security is pointless for this case, because the legal effects for the Plaintiff would be identical either way.

The conclusion  which Ripple makes that XRP is not a security is not supported by an examination of Howey or the no action positions of the SEC which I linked.  Neither is the logic of securities law as applied to crypto discussions made by Director Hinman addressed which I likewise linked. 

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In seeking to dismiss the complaint, Ripple touches on the legal classification of XRP only briefly, stating federal regulators have concluded that it is a currency and a commodity rather than a security.

Instead, Ripple's primary argument is that the case can't go forward because it was filed too late. The company invokes a law that shields companies from lawsuits related to the sale of unregistered securities once three years has passed.

 

https://fortune.com/2019/09/20/ripple-xrp-securities-lawsuit/

The Fortune article I quoted above and re-quote comes to the same point I have.  Ripple does not respond on the merits under relevant law (Howey) why XRP is not a security. It asks us to assume that XRP is a security and therefore is exempt based upon the statute of repose.  Which is a bogus argument.  It is like Ripple is saying "I ***** a woman three years ago and she did not report me, so after three years,  I can go **** another woman and that is alright.and I should not be prosecuted" Dumb defense and not supported.

The refusal on the part of Ripple to discuss the relevant law and differentiate itself from the current positions of the SEC is a concession to the fact that XRP is a security. The FinCEN consent agreement is quoted above too and no SEC or FIN Cen regulator have said that XRP is a "currency" and not a security.  

Really crappy lawyering and your lawyering abilities are nonexistent.

 

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6 minutes ago, Sporticus said:

The conclusion  which Ripple makes that XRP is not a security is not supported by an examination of Howey or the no action positions of the SEC which I linked.  Neither is the logic of securities law as applied to crypto discussions made by Director Hinman addressed which I likewise linked. 

https://fortune.com/2019/09/20/ripple-xrp-securities-lawsuit/

The Fortune article I quoted above and re-quote comes to the same point I have.  Ripple does not respond on the merits under relevant law (Howey) why XRP is not a security. It asks us to assume that XRP is a security and therefore is exempt based upon the statute of repose.  Which is a bogus argument.  It is like Ripple is saying "I ***** a woman three years ago and she did not report me, so after three years,  I can go **** another woman and that is alright.and I should not be prosecuted" Dumb defense and not supported.

The refusal on the part of Ripple to discuss the relevant law and differentiate itself from the current positions of the SEC is a concession to the fact that XRP is a security. The FinCEN consent agreement is quoted above too and no SEC or FIN Cen regulator have said that XRP is a "currency" and not a security.  

Really crappy lawyering and your lawyering abilities are nonexistent.

 

Reserving space to reply later.

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2 minutes ago, Tinyaccount said:

This guy is either not what he claims,  or is so invested in finding Ripple a security that he is willing to lie about his understanding.

There are only those two possibilities since it’s perfectly clear his claim was false.

You are consistently a Ripple shill and have no objectivity or understanding of what the subject matter of securities characterization as applied to Ripple are about.

You profess to know so much then tell us why Ripple has not done what Turnkey Jet and Pocketful of Quarters id in obtaining a no action position.  

Also, prove it  where the United States regulators have said that XRP is a "currency" and not a security. 

Also explain why if Ripple and XRP are not securities, why hasn't Ripple obtained an SEC no action letter.  A no action letter would put the issue of the SEC characterization of XRP to rest.

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7 minutes ago, Sporticus said:

You are consistently a Ripple shill

I’m starting to wonder if you are a bot or perhaps some sort of a AI assisted post creation assistant for a human fudder.

You made an outrageous claim that they said something,  I asked you to show where,  you flood quoted,  and the wash up is that a lawyer or any reasonable reader would know you claim was totally false.

So since your claim was false then you either don’t understand what you are on about and thought it was true because you failed to see the obvious,  or you are deliberately spreading misinformation.  There really is only those two possibilities.

 

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59 minutes ago, Sporticus said:

The refusal on the part of Ripple to discuss the relevant law and differentiate itself from the current positions of the SEC is a concession to the fact that XRP is a security.

Again with the specious claims.  That is not so at all.

Its called keeping your powder dry.  In judo you use the least force necessary to defeat the opponent.  Same principle here and if you don’t understand that then your motives or your understanding is suspect.

You make outrageous claims and then when called on them argue anything but the original claim.

Try answering a simple question without dissembling:

Did Ripple say that XRP is a security as you claimed they did?  (If so quote it please without a wall of text.)

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This is insane. Ripple is being sued.  At issue is whether they are a security.  They are not required to make any particular case, only to win it.  If it comes to it, the courts can rule on the category of investment, but Ripple is not compelled to do so, especially if they can win their case on procedural grounds.

 

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1 hour ago, EasterBunny said:

I’m not an expert but in their 2015 settlement with FinCEN the word ‘currency’ was found 28 times. 0 hits for ‘commodity’ or ‘security’.

download

XRP is not legal tender or a currency in the sense of a dollar or a pound.  The refernces are made to a "virtual currency"or a "digital currency. For Ripple to assert that XRP is a currency is disingenuous at best and looks like another fraudulent assertion.

 

Here is the Fin Cen statement to substantiate this position that Ripple is not regarded as  a currency, rather it is regarded as a virtual currency or a digital currency or a cryptocurrency by this regulator. Nowhere is there a rendering of any decision that it is not a security.  Moreover, FinCEN does not have jurisdiction to determine the regulation of securities. 

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WASHINGTON, DC – The Financial Crimes Enforcement Network (FinCEN), working in coordination with the U.S. Attorney's Office for the Northern District of California (USAO-NDCA), assessed a $700,000 civil money penalty today against Ripple Labs Inc. and its wholly-owned subsidiary, XRP II, LLC (formerly known as XRP Fund II, LLC). Ripple Labs willfully violated several requirements of the Bank Secrecy Act (BSA) by acting as a money services business (MSB) and selling its virtual currency, known as XRP, without registering with FinCEN, and by failing to implement and maintain an adequate anti-money laundering (AML) program designed to protect its products from use by money launderers or terrorist financiers. XRP II later assumed Ripple Labs' functions of selling virtual currency and acting as an MSB; however, like its parent company, XRP II willfully violated the BSA by failing to implement an effective AML program, and by failing to report suspicious activity related to several financial transactions.

Virtual currency exchangers must bring products to market that comply with our anti-money laundering laws,”said FinCEN Director Jennifer Shasky Calvery. “Innovation is laudable but only as long as it does not unreasonably expose our financial system to tech-smart criminals eager to abuse the latest and most complex products.”

FinCEN's assessment is concurrent with the USAO-NDCA's announcement of a settlement agreement with Ripple Labs and XRP II. In that settlement, the companies resolved possible criminal charges and forfeited $450,000. The $450,000 forfeiture in that action will be credited to partially satisfy FinCEN's $700,000 civil money penalty. A Statement of Facts and Violations, describing the underlying activity and details of the BSA violations, is incorporated into FinCEN's assessment as well as the USAO-NDCA's settlement.

Both actions were accompanied by an agreement by Ripple and XRP II to engage in remedial steps to ensure future compliance with AML/CFT obligations, as well as enhanced remedial measures. Among these steps are agreements to only transact XRP and “Ripple Trade” activity through a registered MSB: to implement and maintain an effective AML program: to comply with the Funds Transfer and Funds Travel Rules: to conduct a three-year “look-back” to require suspicious activity reporting for prior suspicious transactions and a requirement for the companies to retain external independent auditors to review their compliance with the BSA every two years up to and including 2020. Pursuant to the agreement, Ripple Labs will also undertake certain enhancements to the Ripple Protocol to appropriately monitor all future transactions.

“By these agreements, we demonstrate again that we will remain vigilant to ensure the security of, and prevent the misuse of, the financial markets,” said U.S. Attorney Melinda Haag. “Ripple Labs Inc. and its wholly-owned subsidiary both have acknowledged that digital currency providers have an obligation not only to refrain from illegal activity, but also to ensure they are not profiting by creating products that allow would–be criminals to avoid detection. We hope that this sets an industry standard in the important new space of digital currency.”

“Federal laws that regulate the reporting of financial transactions are in place to detect and stop illegal activities, including those in the virtual currency arena,” said Richard Weber, Chief, IRS Criminal Investigation. “Unregulated, virtual currency opens the door for criminals to anonymously conduct illegal activities online, eroding our financial systems and creating a Wild West environment where following the law is a choice rather than a requirement.”

Ripple Labs Inc., headquartered in San Francisco, CA, facilitated transfers of virtual currency and provided virtual currency exchange transaction services. XRP II, LLC is a wholly-owned subsidiary of Ripple Labs that was incorporated as XRP Fund II, LLC in South Carolina on July 1, 2013; the company changed its name to XRP II in July 2014. As of 2015, Ripple is the second-largest cryptocurrency by market capitalization, after Bitcoin. On March 18, 2013, FinCEN released guidance clarifying the applicability of regulations implementing the BSA, and the requirement for certain participants in the virtual currency arena–namely, virtual currency exchangers and administrators–to register as MSBs with FinCEN pursuant to federal law.

Director Shasky Calvery expressed her appreciation to the U.S. Attorney's Office for the Northern District of California and to the Internal Revenue Service-Criminal Investigation Division for their contributions to the investigation and strong partnership with FinCEN.

FinCEN seeks to protect the U.S. financial system from being exploited by illicit activity. Its efforts are focused on compromised financial institutions and their employees; significant fraud; third-party money launderers; transnational organized crime and security threats; and cyber threats. FinCEN has a broad array of enforcement authorities to target both domestic and foreign actions affecting the U.S. financial system.

 

 

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