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SEC Memo In Opposition To [John Deaton's] Motion To Intervene


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https://www.crypto-law.us/wp-content/uploads/2021/05/SEC_Memorandum-of-Law_Opposing-Motion-to-Intervene-050321.pdf Just started to read it, but one good statement by the SEC is:  "this particular

But in a way they are doing exactly the same to the Courts that they did to Ripple; constantly moving the goalposts.  They are making Ripple's case for them.  The Courts are going to end up throwing t

We have been on this roundabout a few times.  I think somewhere SEC have said secondary sales can be securities, even after telling the court that they are not because of section 5 clause 4.  SEC chan

Later, the SEC states that it is not suing anyone who traded xrp on the secondary market or any third party trading platform (exchanges), and that it has the right to forego any such suit in its prosecutorial discretion.

Can't the SEC see that the entire crypto community, and especially the xrp community, is just hanging in limbo here????

Maybe the SEC is not legally required to say whether secondary market trades are not securities transactions, but it sure as hell would make things in the crypto community a lot clearer.  I will be looking forward to Hogan's opinion on this as he has been following it a lot closer than I have.  

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6 hours ago, Alluvial said:

Can't the SEC see that the entire crypto community, and especially the xrp community, is just hanging in limbo here????

You're assuming he cares.  He either doesn't - or he's suppressing it.  He is an attorney, after all - many of them lose their souls during their training.  Introduce a narrow mind to truth tables and suddenly they don't see the big picture, anymore, but good luck convincing them of that without a fight.  Ask the wives!

Seen it happen.  Sad.

Edited by NightJanitor
Human Costs
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6 hours ago, Alluvial said:

Maybe the SEC is not legally required to say whether secondary market trades are not securities transactions, but it sure as hell would make things in the crypto community a lot clearer. 

Well if the SEC would issue such a statement, wouldn't that be implicitly and officially announcing that the token XRP itself is not a security?

Would be great if such a statement were enforced by the judge that would provide much more clarity and the trial could focus on the core issues, e.g. the sales of the tokens limited to the parties brought to trial. For sure the SEC is not interested.

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8 hours ago, Alluvial said:

https://www.crypto-law.us/wp-content/uploads/2021/05/SEC_Memorandum-of-Law_Opposing-Motion-to-Intervene-050321.pdf

Just started to read it, but one good statement by the SEC is:  "this particular [SEC] action [against Ripple, Garlinghouse and Larsen] does not charge transactions between individuals in the secondary market as violations of Section 5."  That's page 2 of the preliminary statement by the SEC.

That suggests that the SEC is only concerned with the xrp sales by Ripple, BG and CL, and is basically saying that all other xrp transactions (taking place on the secondary market) are not securities transactions.  That would be a big deal IMO.  Unless I'm jumping to conclusions, this would mean that all transactions on the secondary market have been and will continue to be non-securities transactions, which would mean exchanges could list again, and businesses could use ODL without their attorneys worrying about whether xrp is a security.    But I need to read the rest of it.  Hopefully, the judge will require the SEC make that point clear.  Just an initial impression after reading a couple pages.

Later, the SEC states:

"The Amended Complaint’s allegations concern offers and sales of XRP by the issuer of XRP, Ripple, and two of Ripple’s control persons and affiliates, Larsen and Garlinghouse, from 2013 to 2020. The Amended Complaint does not allege that ordinary trading transactions by individuals in the secondary market violate Section 5 or name as a defendant any third-party digital asset trading platform. The core of the dispute in this enforcement action is whether Defendants offered and sold XRP as “investment contracts” and therefore as “securities”..."  [my emphasis].

The SEC is not saying 100% that all xrp transactions other than those of Ripple BG and CL are not securities transactions, but it's pretty damn close.  That's great news IMO!!

We have been on this roundabout a few times.  I think somewhere SEC have said secondary sales can be securities, even after telling the court that they are not because of section 5 clause 4.  SEC change their mind all the time and say what they want to say on the day.  Quite recently they said BTC and ETH could be a security too.  Every SEC officer has a different opinion, and the statements coming out of SEC have been contradictory, never being clear and never giving exchanges the clearance they need to start selling XRP again

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This is pretty good news indeed. As Julian said, though, the SEC goes back and forth on what they say and what actually counts and what doesn’t count. Like they’ll be very misleading about something and then say they’ve never made an “official” statement about it. They know exactly what they’re doing.

We had similar news earlier in the case that would clear exchanges to relist but alas, they still haven’t. I assume it will be the same with this. They might be waiting on that no action letter before they do allow XRP trading again. I’d love to be wrong, though. 

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25 minutes ago, Julian_Williams said:

We have been on this roundabout a few times.  I think somewhere SEC have said secondary sales can be securities, even after telling the court that they are not because of section 5 clause 4.  SEC change their mind all the time and say what they want to say on the day.  Quite recently they said BTC and ETH could be a security too.  Every SEC officer has a different opinion, and the statements coming out of SEC have been contradictory, never being clear and never giving exchanges the clearance they need to start selling XRP again

That for sure the case, that s why in their reponse previous response about email (to ripple motion) they say that internal discussion arent relevant and not reflecting the SEC position

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1 hour ago, Wolfaolyth said:

That for sure the case, that s why in their reponse previous response about email (to ripple motion) they say that internal discussion arent relevant and not reflecting the SEC position

But in a way they are doing exactly the same to the Courts that they did to Ripple; constantly moving the goalposts.  They are making Ripple's case for them.  The Courts are going to end up throwing their arms in the air and saying how can we make a judgement if SEC themselves cannot decide what is and what is not a security.   This is why Ripple have been so confused for so many years.  SEC keep moving the goalposts.

Edited by Julian_Williams
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18 minutes ago, Julian_Williams said:

But in a way they are doing exactly the same to the Courts that they did to Ripple; constantly moving the goalposts.  They are making Ripple's case for them.  The Courts are going to end up throwing their arms in the air and saying how can we make a judgement if SEC themselves cannot decide what is and what is not a security.   This is why Ripple have been so confused for so many years.  SEC keep moving the goalposts.

Might explain why Garlinghouse, reportedly, finally reached the "just sue me, then" pt.  Everyone watching this - for whatever reason - sees exactly what kind of shop the SEC is running.  They'd be best served to call the whole thing remnants of the previous administration - throw them under the bus - issue some no-actions - call it a political win...

That's not a call that the attorneys or lower level functionaries at SEC can make - maybe Gensler can't even do it. :)

Psaki seems to refer all "crypto" questions to Yellen, so, there's yet another internecine/interadmin war or confusion.

I dunno... I'm just way tired of being collateral damage.  (This stuff has the potential to lose (or gain!) a lot of votes...)

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10 hours ago, Alluvial said:

Later, the SEC states that it is not suing anyone who traded xrp on the secondary market or any third party trading platform (exchanges), and that it has the right to forego any such suit in its prosecutorial discretion.

Can't the SEC see that the entire crypto community, and especially the xrp community, is just hanging in limbo here????

Maybe the SEC is not legally required to say whether secondary market trades are not securities transactions, but it sure as hell would make things in the crypto community a lot clearer.  I will be looking forward to Hogan's opinion on this as he has been following it a lot closer than I have.  

Remember that the main goal of this litigation was to hammer not just Ripple but also XRP markets.
How easy was and still is it for the SEC to say that ONLY the sales from Ripple and Ripple board members violated the securities laws? They (and we know exactly who "THEY" are) KNEW that by letting the whole of XRP sales in a gray zone, all US based exchanges would have to delist XRP if they wanted to avoid sanctions.

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31 minutes ago, Julian_Williams said:

But in a way they are doing exactly the same to the Courts that they did to Ripple; constantly moving the goalposts.  They are making Ripple's case for them.  The Courts are going to end up throwing their arms in the air and saying how can we make a judgement if SEC themselves cannot decide what is and what is not a security.   This is why Ripple have been so confused for so many years.  SEC keep moving the goalposts.

Yep there never was and still isn't a fair notice about XRP being a security or not.....

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1 hour ago, Julian_Williams said:

But in a way they are doing exactly the same to the Courts that they did to Ripple; constantly moving the goalposts.  They are making Ripple's case for them.  The Courts are going to end up throwing their arms in the air and saying how can we make a judgement if SEC themselves cannot decide what is and what is not a security.   This is why Ripple have been so confused for so many years.  SEC keep moving the goalposts.

Such a dismiss from the court would be very bad because that would again let the door half open without clarification....so the show could continue wih another administration later....

The fact is SEC cannot really give a statuse to xrp as a currencies or a securities because they (for i have understand, i am learning....) use the howey test to determine the nature of the asset. The major problem is that this test is too old to appreciate cryptocurrency and apply to them give a mitigated answer...

At the end of the lawsuit process, i hope the test will evolve or a new test created for crypto...if it s not the case you will always have an uncertainty for the future..

That s why it s good for the lawsuit to go further even it s hurting now...

My main concern is that it should be faster....and now for what i see SEC is playing  for the win and is clearly wasting time fighting on each ridiculous details...so i don t understand :  what is their ***** objectives after all ???

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1 hour ago, Wolfaolyth said:

Such a dismiss from the court would be very bad because that would again let the door half open without clarification....so the show could continue wih another administration later....

The fact is SEC cannot really give a statuse to xrp as a currencies or a securities because they (for i have understand, i am learning....) use the howey test to determine the nature of the asset. The major problem is that this test is too old to appreciate cryptocurrency and apply to them give a mitigated answer...

At the end of the lawsuit process, i hope the test will evolve or a new test created for crypto...if it s not the case you will always have an uncertainty for the future..

That s why it s good for the lawsuit to go further even it s hurting now...

My main concern is that it should be faster....and now for what i see SEC is playing  for the win and is clearly wasting time fighting on each ridiculous details...so i don t understand :  what is their ***** objectives after all ???

I believe Hogan has said they cannot attack XRP/Ripple twice.  After this action the matter will be settled for XRP, but other currencies will be left in a state of not knowing how they stand.  ADA and ETH are spoken of as being next in line to be sued by SEC.

There has been a lot of talk, especially from Hester Pierce, suggesting that the authorities will be setting up a sandbox in which new ICOs will be allowed to develop and distribute their tokens.  The way H Pierce talks make it almost sound as if Gensler is her ally in getting this sorted out in this way.

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1 hour ago, Julian_Williams said:

I believe Hogan has said they cannot attack XRP/Ripple twice.

They can't be tried twice for the same crime. But if Ripple begins selling XRP again after the trial, the SEC can in theory allege that those new sales are unregistered securities. It's highly unlikely, but the overall point is that there's no clarity for crypto in the US. What Ripple wants is some defined legal area where as long as they stay within it they know they're within the law. That's what will allow them to develop business relationships in the US.

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