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#XRP The Security


LetHerRip
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I've always maintained that Brad Garlinghouse is a total corporate parasite who was an exec at dot.com has beens AOL and Yahoo and is clueless to run something in this space.  His statement's and Ripple defending itself by attacking Bitcoin and Ether is really going to make Ripple and XRP a pariah in the crypto space.  Literally WTF are they thinking?

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By alleging that Ripple’s distributions of XRP are investment contracts while maintaining that bitcoin and ether are not securities, the Commission is picking virtual currency winners and losers, destroying U.S.-based, consumer-friendly innovation in the process....XRP consistently ranks among the top three virtual currencies by market capitalization—alongside bitcoin and ether, the two Chinese-controlled virtual currencies that the SEC has stated are not securities. Policy reasons counsel against finding XRP to be an investment contract....Innovation in the cryptocurrency industry will be fully ceded to China. The Bitcoin and Ethereum blockchains are highly susceptible to Chinese control because both are subject to simple majority rule.

https://ripple.com/wp-content/uploads/2020/12/Ripple-Wells-Submission-Summary.pdf

Edited by fatlever
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4 hours ago, fatlever said:

I've always maintained that Brad Garlinghouse is a total corporate parasite who was an exec at dot.com has beens AOL and Yahoo and is clueless to run something in this space.  His statement's and Ripple defending itself by attacking Bitcoin and Ether is really going to make Ripple and XRP a pariah in the crypto space.  Literally WTF are they thinking?

https://ripple.com/wp-content/uploads/2020/12/Ripple-Wells-Submission-Summary.pdf

It is odd, but I wouldn't expect any less from him. This is a good example of the mentality that got him into the situation with getting sued by the SEC.

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On 11/11/2020 at 4:04 AM, LetHerRip said:

Gary Gensler, a Washington and Wall Street veteran who has closely studied the budding cryptocurrency field, will lead the financial policy transition team for projected U.S. President-elect Joe Biden.

Who is Gar Gensler?

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https://www.coindesk.com/biden-confirms-gary-gensler-will-lead-financial-policy-transition-team

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https://cointelegraph.com/news/biden-taps-crypto-savvy-former-cftc-chair-for-transition-team

 

Can you add Bill Clinton in there too?

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A security is an investment contract by definition with the aim of generating profit.

Only an ICO that has no actual usage or even network on their own (ie. ERC-20 tokens) might fall into this category, because its only purpose is to raise capital.

Tokens that have a specific use (ie. currency, gas, spam protection) in a (distributed) network are beyond the control of the SEC.

The latter tokens are either currencies or commodities, but not investment contracts (securities).

I do like mind games though. Actually, it wouldn't be wrong to serve both worlds. A tradable XRP investment contract as security ("XRP.S") and the existing XRP currency token ("XRP") in the XRPL network.

To use XRP.S in the XRPL network, you would have to create a legally compliant way to convert XRP.S to XRP. In the XRPL network, you would have to find a way to enable a legal exchange from an investment contract to XRP in order to be able to use the XRPL at all.

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The way that Ripple distributes XRP is controversial. 

But, XRP really is not a security IMO. SEC's complaint is very biased. 

SEC says XRP is not a currency because no country uses it as legal tender. But neither does BTC and yet it thinks BTC is a currency not a security. In the complaint, it says even one day XRP becomes legal tender in some country, that would result from Ripple's efforts on which investors' expecting profit relied when investing in the common enterprise (i.e., satisfies Howey test and thus a security).

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365. Even if some country were to recognize XRP as fiat “currency” at some point in the future, that would result from Defendants’ significant entrepreneurial and managerial efforts to date (and likely in the future), on which public investors expecting profit relied when making an investment of money into Defendants’ common enterprise.

SEC totally, completely ignored all other companies in the XRP ecosystem, no mention of xumm, xrpscan, bithomp or whatsoever. It even says in the complaint (on page 44) that XRP investors can't increase demand for XRP by developing a use through entrepreneurial efforts. Ripple is just one company. If Ripple can, why nobody else can? That's like saying no one can start a company to increase demand for an open source software.

SEC apparently doesn't even understand how XRP works or maybe how crypto works in general. On page 48, it seems to suggest that Ripple owning a majority of XRP supply has to do with 51% attack.

SEC says it wants to protect investors. But it didn't act for 8 years. It even tipped the "scammer" at least one day before making the suit public. (And the said "scammer" didn't immediately dump huge amount of the coins, at least the price didn't drop too much.)

Last by not least, XRP gets destroyed by a small amount in each transaction. Does any security do that?

Edited by r0bertz
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On 12/22/2020 at 4:58 PM, fatlever said:

I've always maintained that Brad Garlinghouse is a total corporate parasite who was an exec at dot.com has beens AOL and Yahoo and is clueless to run something in this space.  His statement's and Ripple defending itself by attacking Bitcoin and Ether is really going to make Ripple and XRP a pariah in the crypto space.  Literally WTF are they thinking?

https://ripple.com/wp-content/uploads/2020/12/Ripple-Wells-Submission-Summary.pdf

In all fairness, I bought xrp BECAUSE it’s the banker’s coin. Not that I like Garlinghouse, or bankers... but what they lack in ethics, they seem to overcome with willpower and brutality. Fancy distributed ledger and all, but we are still human beings subject to power, so the libertarian dream of a blockchain revolution will come with difficult compromises, and xrp is the first of such.

Ripple is an American company, presenting solutions to a painfully American problem: the waning power of USD. 

I don’t see America smothering her own child, and is more likely to bring him (Ripple) into the fold; kicking, screaming or bleeding if necessary. 

XRP could become the new war bond 🤣

I say we rebrand to FreedomCoin 🇺🇸
 

Not saying it will always be so political... but Brad is differentiating to show the value in his loyalty. Smart move.

 

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Ship coin may be similar to the XRP example....

Between November 2017 and January 2018, ShipChain raised approximately $27.6 million through an initial coin offering (ICO) of the SHIP token. The company explained to investors at the time that it would use the funds raised in the ICO to develop its blockchain platform and to "revitalize ShipChain's economic condition and replenish its capital so that ShipChain can offer the best possible product.

The SEC said that purchasers of SHIP tokens would have had a reasonable expectation of future benefits from ShipChain's representations and the company's efforts to develop its platform. Considering this background and other matters, the SEC determined that the SHIP tokens were unregistered securities whose offering and sale had not been registered with the SEC.

The SEC ordered, and ShipChain consented to, the following

Forward all SHIP tokens to the SEC and the SEC will deactivate them.
Delist its assets from (SEC-jurisdictional) exchanges within 10 days.
Pay a fine of approximately $2 million to the regulator.

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On 12/24/2020 at 10:06 AM, Karl said:

A security is an investment contract by definition with the aim of generating profit.

Only an ICO that has no actual usage or even network on their own (ie. ERC-20 tokens) might fall into this category, because its only purpose is to raise capital.

Tokens that have a specific use (ie. currency, gas, spam protection) in a (distributed) network are beyond the control of the SEC.

The latter tokens are either currencies or commodities, but not investment contracts (securities).

I do like mind games though. Actually, it wouldn't be wrong to serve both worlds. A tradable XRP investment contract as security ("XRP.S") and the existing XRP currency token ("XRP") in the XRPL network.

To use XRP.S in the XRPL network, you would have to create a legally compliant way to convert XRP.S to XRP. In the XRPL network, you would have to find a way to enable a legal exchange from an investment contract to XRP in order to be able to use the XRPL at all.

They define investment contracts as follows:

Quote

31. The definition of a “security” under the Securities Act includes a wide range of investment vehicles, including “investment contracts.” Investment contracts are instruments Case 1:20-cv-10832 Document 4 Filed 12/22/20 Page 6 of 71 7 through which a person invests money in a common enterprise and reasonably expects profits or returns derived from the entrepreneurial or managerial efforts of others. Courts have found that novel or unique investment vehicles constitute investment contracts, including interests in orange groves, animal breeding programs, railroads, mobile phones, and enterprises that exist only on the Internet. As the United States Supreme Court noted in SEC v. W.J. Howey Co., Congress defined “security” broadly to embody a “flexible rather than a static principle, one that is capable of adaptation to meet the countless and variable schemes devised by those who seek the use of the money of others on the promise of profits.” 328 U.S. 293, 299 (1946)

So the question is, throughout this complaint, if XRP investors like you an me acquired XRP with the expectation that Ripple will put effort to increase the value of XRP. They try to make the case that Ripple started promoting XRP like that (and selling it) and in that sense they behaved as if XRP was a security. And in that sense Ripple is 'the other side' of the contract.

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5 hours ago, jabit said:

Ship coin may be similar to the XRP example....

Between November 2017 and January 2018, ShipChain raised approximately $27.6 million through an initial coin offering (ICO) of the SHIP token. The company explained to investors at the time that it would use the funds raised in the ICO to develop its blockchain platform and to "revitalize ShipChain's economic condition and replenish its capital so that ShipChain can offer the best possible product.

The SEC said that purchasers of SHIP tokens would have had a reasonable expectation of future benefits from ShipChain's representations and the company's efforts to develop its platform. Considering this background and other matters, the SEC determined that the SHIP tokens were unregistered securities whose offering and sale had not been registered with the SEC.

The SEC ordered, and ShipChain consented to, the following

Forward all SHIP tokens to the SEC and the SEC will deactivate them.
Delist its assets from (SEC-jurisdictional) exchanges within 10 days.
Pay a fine of approximately $2 million to the regulator.

I bought Shipchain,  but was banned from their Slack feed after criticising them for distancing themselves from the ICO investors

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5 hours ago, jabit said:

Ship coin may be similar to the XRP example....

Between November 2017 and January 2018, ShipChain raised approximately $27.6 million through an initial coin offering (ICO) of the SHIP token. The company explained to investors at the time that it would use the funds raised in the ICO to develop its blockchain platform and to "revitalize ShipChain's economic condition and replenish its capital so that ShipChain can offer the best possible product.

The SEC said that purchasers of SHIP tokens would have had a reasonable expectation of future benefits from ShipChain's representations and the company's efforts to develop its platform. Considering this background and other matters, the SEC determined that the SHIP tokens were unregistered securities whose offering and sale had not been registered with the SEC.

The SEC ordered, and ShipChain consented to, the following

Forward all SHIP tokens to the SEC and the SEC will deactivate them.
Delist its assets from (SEC-jurisdictional) exchanges within 10 days.
Pay a fine of approximately $2 million to the regulator.

Please no multiple posts of same thing in different threads.  Happy Holidays!

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6 minutes ago, xrphilosophy said:

Please no multiple posts of same thing in different threads.  Happy Holidays!

OK Sorry

But these are posts about securities. And I posted in a place about securities. I felt it was important. It's not spam.

Edited by jabit
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