Jump to content

SEC Rule 501 ....


 Share

Recommended Posts

Nice insights. 
So what would happen if Ripple was told they weren’t allowed to sell the XRP they hold, can that happen even if they are in Escrow?

Is there enough XRP in circulation currently to allow ODL and other projects to carry on and still function as required?

Edited by B088IN
Link to comment
Share on other sites

15 hours ago, B088IN said:

Nice insights. 
So what would happen if Ripple was told they weren’t allowed to sell the XRP they hold, can that happen even if they are in Escrow?

  • Technically- I believe ability to cancel the escrow, is dependent on how they initially configured the escrow on XRP ledger: https://xrpl.org/escrow.html.
  • Legally- This lawyer did allude that the SEC lawsuit is intending to stop Ripple from selling XRP and they will be able to do this if they successfully win the case.

So what happens if Ripple technically configured the escrow so it can't be cancelled, but SEC wins the legal case preventing Ripple from selling/transferring the funds via escrow?  The parties involved with the escrow would have to legally abide by the results of the lawsuit .  The SEC could possibly stipulate requirements for both parties involved with the escrow in regards to how/what they can sell or even come to agreement to hand over access to those accounts. 

 

15 hours ago, B088IN said:

Is there enough XRP in circulation currently to allow ODL and other projects to carry on and still function as required?

  • XRP is divisible by 6 places to the right of the decimal.  So there is already enough XRP in circulation, that we would realistically ever need.  When the general market (like exchanges) or specific areas like RippleNet run low on sellers as compared to buyers, this drives up the prices. There would be enough XRP in circulation, but it would increase in value as compared to other assets/currently like US dollar, other cryptocurrencies, etc.
  • One of the areas that would still exist is the need to arbitrage XRP across all the different exchanges/institutions.  There would be different ratios of buyers vs sellers of XRP, constantly throughout different areas of the ecosystem.  Ripple is basically doing this, by selling XRP to Institutions and making a profit.  The SEC could set limitations so how much Ripple can profit off this.  There are also opportunities for other Institutions, retail investors, 3rd party XRP developers, to take advantage of making money of these arbitrage needs.  For example, if Institutions need quick access to buy/sell XRP, someone else can make a program for them to quickly buy and sell XRP.

 

One of the bigger uncertainty areas that exists and this lawyer alluded to, is what are net benefits vs. negatives if Ripple cannot proceed to profit from selling XRP.  Many of the benefits have already been discussed.  Negatives would include less profits for Ripple to fund their business.  They would be more dependent on other sources of funding especially in short term, like from venture capitalists and IPO.  Depending on how/when Ripple executives could sell their XRP in the future, they could potentially become uninterested in building on XRP.  They have been interested in this in the past, because this was their ticket to becoming billionaires.  If they lose the ability to use XRP to become wealthy, they will no longer want to focus their time on XRP.

Edited by wogojump
Link to comment
Share on other sites

2 hours ago, WarChest said:

With Shipchain, the SEC prevented ShipChain  from using the token, effectively closing the project down.

https://shipchain.io/settle.html

this could apply with xrp too

 

Then they’ll just up sticks and move to a country without any issues with it being a security, basically anywhere in the world apart from the US 

Link to comment
Share on other sites

On 1/16/2021 at 6:06 PM, wogojump said:

I don't recall seeing this video from earlier this week posted on here.  This lawyer does a great job of summarizing the SEC lawsuit, intentions, and next steps in 15 minutes.  I would recommend for everyone to watch this video, even if you have already have a good understanding on the case.

 

 

The video makes it clear that the SEC is not after XRP holders or trying to declare XRP (which already exists in the open market) a security. Instead the case is focused on how Ripple directors are selling XRP to raise capital for Ripple and themselves. The SEC considers those activities as ‘selling XRP as a security’. And I.m.h.o. the SEC is right about that. As a result of the lawsuit the escrow might be frozen or canceled for further sale in the open market. If this happens it will stop the dilution of XRP and it is in fact a very bullish signal for the rise in price of XRP. 👍

Edited by cryptoxrp
Link to comment
Share on other sites

22 hours ago, WarChest said:

With Shipchain, the SEC prevented ShipChain  from using the token, effectively closing the project down.

https://shipchain.io/settle.html

this could apply with xrp too

 

No this could not happen as the SEC is not filing a lawsuit against XRP in the open market. They have filed a lawsuit against the way the Ripple directors are using XRP and enriching Ripple the company and themselves. That is the issue. XRP and the XRP ledger are in the clear👍🤗 I do hope & pray the SEC will succeed in their endeavor as that will maximize the amount of XRP in the open market and stop dilution of the XRP price and value by Ripple the company and its owners. Very bullish if the SEC succeeds 🥳🍾🥂

Edited by cryptoxrp
Link to comment
Share on other sites

57 minutes ago, TheRizz said:

The Sec is not after declaring xrp a security, but is suing Coinbase for selling an unregistered security?

I am not familiar with SEC having any XRP cases filed against Coinbase.  I do see this class action lawsuit filed last December by Thomas Sandoval against Coinbase: 

 

Link to comment
Share on other sites

12 hours ago, cryptoxrp said:

No this could not happen as the SEC is not filing a lawsuit against XRP in the open market. They have filed a lawsuit against the way the Ripple directors are using XRP and enriching Ripple the company and themselves. That is the issue. XRP and the XRP ledger are in the clear👍🤗 I do hope & pray the SEC will succeed in their endeavor as that will maximize the amount of XRP in the open market and stop dilution of the XRP price and value by Ripple the company and its owners. Very bullish if the SEC succeeds 🥳🍾🥂

That still would be bad for XRP. Without the selling, they have no way to prop up or fund their business and XRP is pretty worthless without Ripple's work.

Remember how ODL has 'use'? They have to pay moneygram to use it. The money for that comes from XRP sales. No XRP sales, no payment to moneygram, no ODL usage.

Link to comment
Share on other sites

On 1/17/2021 at 3:30 PM, cryptoxrp said:

The video makes it clear that the SEC is not after XRP holders or trying to declare XRP (which already exists in the open market) a security. Instead the case is focused on how Ripple directors are selling XRP to raise capital for Ripple and themselves. The SEC considers those activities as ‘selling XRP as a security’. And I.m.h.o. the SEC is right about that. As a result of the lawsuit the escrow might be frozen or canceled for further sale in the open market. If this happens it will stop the dilution of XRP and it is in fact a very bullish signal for the rise in price of XRP. 👍

Thanks your for that rational insight! From their perspective, selling XRP vs selling ripple shares still ends with money in the bank. They may have chosen to sell XRP because they don’t want to give up shareholder power, or they could have sold ripple shares to traditional VC to raise funds for expansion. No idea what their rationale was for choosing what to sell.

They knew that XRP we’re not shares of the company when they sold (therefore not a security), but they sold them as if they were. 

They built the business and should take what they have earned. Can’t blame them for doing what anyone else would have done, and kudos for them for being transparent about it. I don’t think the lawsuit will settle the issue though, not expecting clarity anytime soon. 

Link to comment
Share on other sites

3 hours ago, Bear_tax said:

This is an important one to watch. The SEC won outright against Kit - there was no settlement, this went all the way - and the Judge handed down a Summary Judgement, which in practical terms was written by the SEC. They did not seek to prevent the future sales of the Kin token, but mandated that Kit must give them 45 days advance notice of sales, which must be to accredited investors only. If the same rule is applied to Ripple (should the SEC win) then they could still sell XRP to companies and accredited investors. That might slow down their sales, which would be good for the price of XRP. It was not said by Hogan, but it implies to me that normal (non-accredited) investors would not be prevented from selling to each other on or off exchanges etc., as is the case with Kin, I think.

At the very end, it seems that Hogan reveals he has bought some XRP after learning more about the project.

Edited by PunishmentOfLuxury
Link to comment
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
 Share



×
×
  • 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.