What If The SEC Loses Against Ripple?
Gary Gensler and the Securities and Exchange Commission have run all over the cryptocurrency industry. The agency has spread fear through all of crypto. It is to the point that most people take it for granted that the SEC is going to keep winning.
Is that truly the case?
One of the most heavily followed cases is the SEC versus Ripple. After suing in 2020, those behind Ripple decided to fight back. Unlike others that simply accepted a fine along with an admission that it was a security, Ripple is taking the exact opposite approach.
By denying it, this put the onus upon the SEC to prove in court that Ripple was guilty of violating the securities laws. As the case comes to a close, many are wondering if this was achieved.
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The SEC Did Not Prove Its Case
Attorney Jeremy Hogan who is following the case made the assessment that he does not believe the SEC provied its case.
Here took to Twitter explaining why.
This is the crux of what he had to say:
“In the Ripple case, the SEC has failed to argue that there was an implied or explicit contract of investment.
Instead it argues that the purchase agreement is all that is required – and that is all it proves.
But that argument tears the ‘investment’ from the ‘contract’…
As a simple purchase, without more, cannot be an ‘investment contract,’ it is just an investment (like buying an ounce of gold) as there is no obligation for Ripple to do anything except transfer the asset.”
He further added:
“The issue is NOT whether Ripple used money from the sale of XRP to fund its business.
The issue is whether the SEC has proven that there was either an implied or explicit “contract” between Ripple and XRP purchasers relating to their ‘investment.’
There was no such contract.”
Obviously, the lawyers for the SEC would disagree with this conclusion. We also have to be aware that what attorneys on Twitter says about the case mean nothing. The only thing that counts is what the court decides.
That said, there are reports that the court was frustrated with the government's case and some of the things it did. Could this provide some insight into the conclusion?
We will find out when the verdict is rendered.
What If The SEC Loses?
The bigger question is what happens if the SEC loses this case?
With law, one of the keys is the precedant that is set. This is why the SEC getting companies to resolve their cases was the starting point. It helps to build momentum when going after others.
Could the reverse be true? Would a Ripple victory offer the incentive to some other organizations to fight back? It could provide a bit of a road map for other defense attorneys to follow.
There is also a bit of mystique until a loss or two is put in the column. If the SEC does take it on the lip in the Ripple case, how does this affect things going forward?
My guess is that more projects will start to stand up to the SEC. The days of just taking it laying down might come to an end.
Another factor in this is the financial aptitude of the project itself. If the SEC decides to go after Ethereum, as an example, it could be up for another major battle. Ripple has resources but it pales in comparison to what the Ethereum Foundation could muster.
Government Faltering
This is also part of a larger backdrop. Over the past week, I stating to comment on central bank digital currencies (CBDC). The presumption appears to be that people in cryptocurrency believe the government will do as it wants and the end is already written. Yet, there is a lot going on that shows we are in a battle.
The situation with the SEC is just one example.
We see great divide within the US. There are now two presumed Presidential candidates who came out against CBDCs. Robert Kennedy, one who is going to take on Joe Biden for the Democratic nomination, joins Governor Desantis as plainly saying CBDC is a path to an authoritarian regime and surveillance.
This is a fight that is long from over. It is a mistake to believe this story is over. The government is going to have people fighting it on this one.
Over the next couple years, this will heat up as a political debate. That should make for some interesting bedfellows.
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This RIPPLE vs SEC is such an Old School fight already.
This struggle has been happening for long and i was even thinking that they must have settled it.
Funny and childish!
The problem I see is that there are a ton of these cases that the SEC has tossed in on vague charges. I wouldn't be surprised to hear that the evidence on that end is weak and that it gets thrown out. However, it depends on how competent the lawyers are and how well they can argue their points across.
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I also thought this fight was over long time ago. I was surprised to see this post title revealing that, they are still in this court case. I think it’s been too long for an issue like this but all the same we wait and see what happens next.
Ripple will win tough, buy more if you can..😁
$XRP was my introduction to the world of blockchain and cryptocurrency back in August 2017. At the time, my friend had to use Coinpayments.com to transfer the funds to me, as I had no exchange account or other wallets to use to store the funds. I wound up having to buy a Ledger Nano S in order to store the $XRP.
While I have made no attempt to hide my distaste towards those who have championed $XRP as the future of cross-border payments and remittances as well as the basis for any sort of global, borderless currency, I wholeheartedly oppose the federal government of the United States and all of its attempts to prevent technological innovation from taking place on our soil - and the Ripple case is only one example.
We saw what the SEC did to LBRY Inc and the $LBC utility token, and the precedent that was set by the verdict. Secondary sales of tokens are not securities according to that case, but we definitely need clarity as to what $XRP constitutes. As you correctly point out, this case has been in the court system for years now, and I have followed it off and on, understanding that nothing moves quickly - and it's on purpose. To sew fear, uncertainty and doubt, to incite moral panic in the populace, to scare people into avoiding cryptocurrency entirely, and NOT doing their own research, this case could be a game-changer for us all.
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