Worst-case scenario for XRP?

[wogojump]

3 hours ago, cmbartley said:

See: https://www.crunchbase.com/organization/ripple-labs

 

Worst case scenario? Attrition due to lack of legal clarity for years.

I am not sure what your point is? Doesn't matter if they gathered part of their funds legally, if they still gathered some of their funds through illegal methods. It is still against the law to violate SEC laws, regardless of have many funds were gathered through legal practices.

 

Sounds like you are arguing they will not be held liable because not enough SEC clarity was provided to them?  They are going to have to argue this in court. A few areas they will struggle with:

1.Have you read this article: https://www.sec.gov/litigation/complaints/2020/comp-pr2020-338.pdf? They were advised from the beginning by legal advice that XRP may be considered a security:

Quote

3. Ripple engaged in this illegal securities offering from 2013 to the present, even though Ripple received legal advice as early as 2012 that under certain circumstances XRP could be considered an “investment contract” and therefore a security under the federal securities laws

4. Ripple and Larsen ignored this advice and instead elected to assume the risk of initiating a large-scale distribution of XRP without registration.

 

2. Based on number 1, this is their responsibility as executives of a company to do further due diligence research and confirm with the SEC if XRP should be considered a security. Them choosing to ignore this advice, bypassing SEC legal process, then to publicly claim XRP is not a security (when in fact they did not go through the proper legal process to confirm), and proceed to sell $1.3 billion worth of XRP; is not from attrition due to lack of legal clarity.  This is from incompetence and violations of the existing legal process.

 

3. Ripple's legal counsel is also admitting they may have violated existing investment contract SEC laws: 

 

Edited December 24, 2020 by wogojump

[cmbartley]

On 12/24/2020 at 7:29 AM, wogojump said:

I am not sure what your point is? Doesn't matter if they gathered part of their funds legally, if they still gathered some of their funds through illegal methods. It is still against the law to violate SEC laws, regardless of have many funds were gathered through legal practices.

 

Sounds like you are arguing they will not be held liable because not enough SEC clarity was provided to them?  They are going to have to argue this in court. A few areas they will struggle with:

1.Have you read this article: https://www.sec.gov/litigation/complaints/2020/comp-pr2020-338.pdf? They were advised from the beginning by legal advice that XRP may be considered a security:

 

2. Based on number 1, this is their responsibility as executives of a company to do further due diligence research and confirm with the SEC if XRP should be considered a security. Them choosing to ignore this advice, bypassing SEC legal process, then to publicly claim XRP is not a security (when in fact they did not go through the proper legal process to confirm), and proceed to sell $1.3 billion worth of XRP; is not from attrition due to lack of legal clarity.  This is from incompetence and violations of the existing legal process.

 

3. Ripple's legal counsel is also admitting they may have violated existing investment contract SEC laws: 

 

My point was they have raised traditional funding. I was quoting a comment that suggested that they haven't. 

I've read much of the SEC filing. Agree that short term it is bad for Ripple and for XRP. 

This being dragged out for a long time would be terrible for diehard believers who will not sell under any circumstances. Their unwavering fealty may be rewarded by getting a front row seat to the price of XRP drifting toward zero. 

[Mavikick]

On 12/23/2020 at 12:16 PM, tulo said:

The absolute worst case I see, but with low probability to happen is that XRP is considered a security.

1) Ripple will receive a huge fine

2) Most of the exchanges will delist it because of illegal selling of unregistered securities.

3) Price and volumes will plummet.

4) The utility and use case of XRP will be lost.

1) cool

2) amazing

3) expected

4) rightfully so

[Alluvial]

On 12/23/2020 at 10:35 PM, wogojump said:

Ripple's legal counsel is even admitting they may have violated a SEC law and are willing to resolve this in court:

 

Your conclusion is completely wrong.  Ripple's attorney is saying that the only issue in the case is whether certain distributions of xrp by Ripple constitute an investment contract.  The opinion of Ripple and its attorney is that they did not constitute an investment contract, and it is this issue that will be resolved in this litigation.  Saying Ripple's counsel is admitting that it may have violated securities laws and that it is "willing" to resolve the issue in court is stunningly off base.     

[wogojump]

12 hours ago, Alluvial said:

Your conclusion is completely wrong.  Ripple's attorney is saying that the only issue in the case is whether certain distributions of xrp by Ripple constitute an investment contract.  The opinion of Ripple and its attorney is that they did not constitute an investment contract, and it is this issue that will be resolved in this litigation.  Saying Ripple's counsel is admitting that it may have violated securities laws and that it is "willing" to resolve the issue in court is stunningly off base.     

I am assuming you read the linked 2. Twitter quote I provided in my last post, so you may not be understanding the legal jargon.

A legal representative saying there is a legal question if their client followed a specific law, is the same as saying they may have broken that law. Ripple was not following SEC laws, when they were selling XRP.  So when they litigate (dispute) in court, they are going to determine if XRP sales should have been governed and following the existing SEC laws. If yes, Ripple and executive team broke the law.

[Alluvial]

1 hour ago, wogojump said:

I am assuming you read the linked 2. Twitter quote I provided in my last post, so you may not be understanding the legal jargon.

A legal representative saying there is a legal question if their client followed a specific law, is the same as saying they may have broken that law. Ripple was not following SEC laws, when they were selling XRP.  So when they litigate (dispute) in court, they are going to determine if XRP sales should have been governed and following the existing SEC laws. If yes, Ripple and executive team broke the law.

I understand the legal jargon.  I am pretty sure that the Ripple attorney is simply conveying and clarifying the narrow legal issue that is going to be addressed by the court.  Ripple's attorney does not believe that the lawsuit should have ever been filed because xrp is not a security based on the definition of a security; the SEC disagrees, and that's why we have this litigation. 

But Ripple's attorney is not conceding anything.  At this point, all we have heard essentially is an opening argument by the SEC without giving the other side to respond.  We should all wait to see Ripple's Answer, and then we can have a better discussion about it.  If you were being charged with something illegal, would you want everyone to jump to conclusions based solely on what the prosecutor says, or would you want people to reserve judgment until after you have had a chance to respond?

[wogojump]

1 hour ago, Alluvial said:

I understand the legal jargon.  I am pretty sure that the Ripple attorney is simply conveying and clarifying the narrow legal issue that is going to be addressed by the court.  Ripple's attorney does not believe that the lawsuit should have ever been filed because xrp is not a security based on the definition of a security; the SEC disagrees, and that's why we have this litigation. 

But Ripple's attorney is not conceding anything.  At this point, all we have heard essentially is an opening argument by the SEC without giving the other side to respond.  We should all wait to see Ripple's Answer, and then we can have a better discussion about it.  If you were being charged with something illegal, would you want everyone to jump to conclusions based solely on what the prosecutor says, or would you want people to reserve judgment until after you have had a chance to respond?

The quote I provided was directly from Stuart, who is on the legal counsel for Ripple, Chris, and Brad.  You would have to directly ask Stuart to know for sure why he posted that message.  I never said the Ripple' attorney said he is "conceding anything".  I said he is acknowledging his client may have broken the law and wants to dispute this in court.

My assumption, he is trying set the facts straight and do damage control.  Brad has a history of getting himself further into trouble from his online posts (see last few lawsuits directly quoting him on twitter).  It is in the best interest for Stuart on behalf of his clients, to try and get them avoid jail/prison time.  There are a lot of people pissed off at Brad (XRP community, politicians, SEC, crypto industry, etc.)  If these groups get their way, they will try to get Brad charged on a criminal level. Which could be done by showing evidence Ripple and executive team intentionally frauded or misrepresented information to investors, resulting in damages.  Stuart as their legal representative, wants to steer the the court case away from any potential criminal cases that may arise.

Quote

There are no “fraud” or “misrepresentation” claims

It is the best interests for Stuart to make sure him and his clients are not intentionally going out of their way to avoid the legal process.  If they are charged for "Did certain of Ripple’s distributions of XRP constitute an investment contract", this would be the more favorable result.  Since this would most likely not involve jail/prison time, and include a financial slap on the wrist and possibly re-structure of the organization.

Edited December 26, 2020 by wogojump

[SebWrites]

On 12/24/2020 at 3:29 PM, wogojump said:

I am not sure what your point is? Doesn't matter if they gathered part of their funds legally, if they still gathered some of their funds through illegal methods. It is still against the law to violate SEC laws, regardless of have many funds were gathered through legal practices.

 

Sounds like you are arguing they will not be held liable because not enough SEC clarity was provided to them?  They are going to have to argue this in court. A few areas they will struggle with:

1.Have you read this article: https://www.sec.gov/litigation/complaints/2020/comp-pr2020-338.pdf? They were advised from the beginning by legal advice that XRP may be considered a security:

 

I'm no legal expert, but I think you're misconstruing the words in the link you asked people to look at. 

The charge says that: "XRP 'could' be construed as a security."

Which from what I understand they were always aware this could be construed to be a security, but believed this not to be. 

It also raises the question, and this is strange, if SEC was aware of this mismanagement right back at 2012/13... then why wait right up until now to bring any charges?

Also, doubly peculiar, now when many of the SEC are leaving I gather?

Perhaps I'm falsely trying to reassure myself, but there does seem inconsistencies in this argument, and you do wonder what the SEC is trying to achieve?

Additionally Ripple has been very honest about its intentions and concerns about not being sure it is classed as a security, which, why would it be if it had anything to hide?

In this article they have spoken of moving abroad, so I do wonder if this is what has triggered the move by the SEC now?

https://www.finextra.com/newsarticle/36817/ripple-weighs-move-to-london-over-xrps-security-status

Perhaps the SEC are overreaching on this case and the charges, in hope of accruing some unpaid taxes and such like, before Ripples potentially leaves?

Whatever the situation, this does not seem the right way to go about encouraging US crypto currencies to stay in America.

 

Edited December 30, 2020 by SebWrites