Jump to content

Court filings in SEC case - Answer deadline and a few more interesting attorneys entered for Ripple


Recommended Posts

Just now, kanaas said:

As a SEC chair she always must have known about rule 501 under regulation D. Ripple always had the option to sell XRP under exemption as an unregistered security to accredited investors. But ... they opted for doing business behind the curtains.... NDA's you know. When you carefully read the SEC allegations they do not say that XRP is a security. At least not all XRP and for sure not those in your or my wallet. What the allegation says is that Ripple SOLD XRP AS a security. And as a private company they were allowed .... IF they did proper reporting of those sales. Brad and the "Ripple Legal Department" always hav been saying there was no regulation, but now it seems that there WAS a possibility to go by the rules. I can understand that WE didn't know about those rules. But a SEC chair? High profile lawyers? Or was is that this regulation WS well known but they just didn't like to report? 

This also goes PERFECTLY in line with other jurisdictions (UK, Japan, Europe, ....) not seeing XRP as a security because Ripple is an American company and their sales have to go by US laws. If they were Japanese there might have been the same problem over there. It's not the nature of the asset that defines it as a security, it's the nature of the initial (first time) SALES as a funding vehicle that makes it, temporally and only for that first sale, an unregistered security. Makes a lot of sense to me....

Link to post
Share on other sites
  • Replies 38
  • Created
  • Last Reply

Top Posters In This Topic

Top Posters In This Topic

Popular Posts

I checked the Pacer website and saw that the Answer to the SEC Complaint is to be filed with the court no later than March 5, 2021.  That deadline applies to all defendants (Ripple, BG and CL).  Rippl

Great analysis from this guy. Not an XRP holder as he states which makes it unbiased. To summarize, he says XRP cannot be deemed a security, because SEC does not even ask that, most likely there will

To make amends to the retail traders, the new SEC team should allow Brad and Chris to pump XRP's price back to the exact price that XRP was at before the SEC news hit.  In soccer, we call it a "drop b

22 minutes ago, kanaas said:

This also goes PERFECTLY in line with other jurisdictions (UK, Japan, Europe, ....) not seeing XRP as a security because Ripple is an American company and their sales have to go by US laws. If they were Japanese there might have been the same problem over there. It's not the nature of the asset that defines it as a security, it's the nature of the initial (first time) SALES as a funding vehicle that makes it, temporally and only for that first sale, an unregistered security. Makes a lot of sense to me....

That sounds logical, but I am not lawyer ;-)

The issue also I think is, if Ripple would have sold under 501 D they would have made the statement that it is a security. Not so much a problem for the initial sales, but more so for exchanges, because if XRP would be a security for everybody, then we would not be able to trade in on the exchanges. So there is a need for new law, to determine when an asset (or ICO) is a security and when it is no more. This is also why Ripple is pressing for #DCEA, which makes exactly that split

Link to post
Share on other sites
5 hours ago, jn_r said:

That sounds logical, but I am not lawyer ;-)

The issue also I think is, if Ripple would have sold under 501 D they would have made the statement that it is a security. Not so much a problem for the initial sales, but more so for exchanges, because if XRP would be a security for everybody, then we would not be able to trade in on the exchanges. So there is a need for new law, to determine when an asset (or ICO) is a security and when it is no more. This is also why Ripple is pressing for #DCEA, which makes exactly that split

Actually there's not so much to add to present rules. I even doubt if there is need for a new law to say that every ICO has to be reported a an unregistered security and that the only way to bring it into the market - legally - has to be by accredited investors and that once it's on the market it's just a tradable digital asset....

Do one need a new law when all this is available by SEC rule 501 under regulation D ?
Why kept the SEC silence all the time?
Why did it take 8 years to dig it up from under their own thick layer of dust?

Just asking for my friends at the SEC....

Link to post
Share on other sites
11 hours ago, kanaas said:

As a SEC chair she always must have known about rule 501 under regulation D. Ripple always had the option to sell XRP under exemption as an unregistered security to accredited investors. But ... they opted for doing business behind the curtains.... NDA's you know. When you carefully read the SEC allegations they do not say that XRP is a security. At least not all XRP and for sure not those in your or my wallet. What the allegation says is that Ripple SOLD XRP AS a security. And as a private company they were allowed .... IF they did proper reporting of those sales. Brad and the "Ripple Legal Department" always have been saying there was no regulation, but now it seems that there WAS a possibility to go by the rules. I can understand that WE didn't know about those rules. But a SEC chair? High profile lawyers? Or was is that this regulation WAS well known but they just didn't like to report? 

I think Ripple felt that because xrp is not a security (and that the sales of xrp to the public did not meet the definition of an investment contract based on the Howey test) that there was no reason to register the sales as a securities offering.  Registering the sales with the SEC, and selling only to accredited investors, would have been a nightmare because those xrp are deemed securities at that point, they don't just become non-securities.  In other words, an accredited investor doesn't just get to turn around and sell the xrp on some exchange to a non-accredited investor.  That's my understanding of it.  I think the big sticking point is that Ripple can't register its future sales of xrps without causing big problems because xrp cannot be a cryptocurrency and a bridge currency if it's a security.  And what to do with all the xrps that are already out in the public?  If they are sold as a securities offering in the future (as was ordered by the court in Kik), how and when do those xrps become non-securities? 

The sick thing is that virtually no investors of xrp wanted a prospectus or would have been better served by having a prospectus.

For sure Mary Jo White knew (and knows) this Rule very well, and based on her understanding she apparently feels that xrp is not a security, and she does not feel that Ripple was required to register the sales because the sales of xrp to the public were not investment contracts based on Howey.  I am looking forward to the answer or some motion by Ripple where it distinguishes our case from the Kik case.  It may argue that in addition to be distinguishable from the Kik case, the court in Kik came to the wrong conclusion.  I think the former avenue will be more persuasive than the latter.

Link to post
Share on other sites
On 1/19/2021 at 11:08 PM, Alluvial said:

I think Ripple felt that because xrp is not a security (and that the sales of xrp to the public did not meet the definition of an investment contract based on the Howey test) that there was no reason to register the sales as a securities offering.  Registering the sales with the SEC, and selling only to accredited investors, would have been a nightmare because those xrp are deemed securities at that point, they don't just become non-securities.  In other words, an accredited investor doesn't just get to turn around and sell the xrp on some exchange to a non-accredited investor.  That's my understanding of it.  I think the big sticking point is that Ripple can't register its future sales of xrps without causing big problems because xrp cannot be a cryptocurrency and a bridge currency if it's a security.  And what to do with all the xrps that are already out in the public?  If they are sold as a securities offering in the future (as was ordered by the court in Kik), how and when do those xrps become non-securities? 

The sick thing is that virtually no investors of xrp wanted a prospectus or would have been better served by having a prospectus.

For sure Mary Jo White knew (and knows) this Rule very well, and based on her understanding she apparently feels that xrp is not a security, and she does not feel that Ripple was required to register the sales because the sales of xrp to the public were not investment contracts based on Howey.  I am looking forward to the answer or some motion by Ripple where it distinguishes our case from the Kik case.  It may argue that in addition to be distinguishable from the Kik case, the court in Kik came to the wrong conclusion.  I think the former avenue will be more persuasive than the latter.

Agree with most of what you write, but at least they could have been more open about their XRP sales. The “XRP reports” are nothing more than fluff and are far from what real reports should look like. After all, such reports, if not made by the official filing documents, would not admit that XRP is a security, but it would have avoided accusations of disparate information for the tiny XRP investor. After all, it has always been something the XRP community has been asking for. To be fair, as an XRP investor, do you think it fair that Ripple and insiders like Brad and Chris are secretly bringing unknown amounts of XRP to the markets? THEY know what's going on ... you don't

Edited by kanaas
Link to post
Share on other sites

OK the founders were gifted their xrp at creation of the company,

a mistake,then, maybe/sure,

But Brad was given his some years later, as part of his appointment as ceo contract.

He was not a founder.

 

Link to post
Share on other sites
1 hour ago, kanaas said:

To be fair, as an XRP investor, do you think it fair that Ripple and insiders like Brad and Chris are secretly bringing unknown amounts of XRP to the markets? THEY know what's going on ... you don't

It is a problem that they have information that we don't.  So, for example, they know about the Moneygram deal or some positive announcement that is upcoming.  They could wait until after the news is released and then sell at a higher price.  But I do recall that they sign some type of ethical affirmation about not doing such things, but do they abide by it? Who knows?  Probably.  They could establish a protocol where if they decide to sell a certain amount, those sales could be made by a third party who does not have the inside information and only must sell over a certain time period designated. 

But I will say that I don't have any problem with them selling their xrps, and I have always thought that they were doing so.  With the price increasing so much from the early days, xrp has become the vast majority of their net worth, and it makes sense to sell some and diversify.  I think the community would be better off just assuming that people like Brad and Chris and others, with huge amounts of xrp, are selling all the time. 

I don't even have a problem with the amounts that they received.  Brad and Chris are very sharp guys who could be running other companies and making a lot of money doing so.  They took a big chance on Ripple and they should get the benefit of their foresight, skills, and the risk they took.  We knew that Chris, Jed and Arthur received 20% of the xrps.  We knew Ripple had a big percentage of the remaining amount, and we knew that Brad was going to be paid a lot of xrps for agreeing to become CEO and for future compensation.  I think a lot of people just don't like the idea of them selling when we are buying - we want them to be on the same team as us.  I think they are on our team, and my guess is their desire to see xrp succeed is a lot stronger than ours.  They're just selling some of their huge stash.        

Link to post
Share on other sites

at the end of the day the object of the company was / is to distribute the xrp,

its not their fault it is as valuable as itis today:),

if they dont sell as much, we will be three generations gone before its done

Edited by paym8
spelling three
Link to post
Share on other sites
16 hours ago, Alluvial said:

But I will say that I don't have any problem with them selling their xrps, and I have always thought that they were doing so.  With the price increasing so much from the early days, xrp has become the vast majority of their net worth, and it makes sense to sell some and diversify.  I think the community would be better off just assuming that people like Brad and Chris and others, with huge amounts of xrp, are selling all the time. 

Well it would have been easy to define a sales arrangement just as was done for Jeb. So a programatic "time and volume" driven distribution scheme which would have been traceable and would have avoided any suspect of non ethical behaviour. They could have done this keeping it secret until disclosure is requested by authorities, so not a public but an internal arrangement.

The reality is that as long as such an arrangement doesn't exist, automatically the suspect of sales based on convenience rather than a "business" driven distribution, which is needed for pre mined tokens, will prevail...

Edited by Frisia
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...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.