The Crypto Sea Serpent – December 2020. It is since this date that the Securities and Exchange Commission (SEC) and the company Ripple Labs confront each other before the amazed and curious eyes of the small world of cryptocurrencies. Often announced, but always postponed, the final outcome of the case would be very close. On which side will the balance of the justice American? State of the forces present.
Ripple persists and signs on the nature of its XRP tokens
Over the past weekend, Ripple filed one last request asking the rejection definitive of the proceedings concerning it. And, it is still about the status of the token XRP and its nature – disputed – of ” title financial“. In this document, it is stated that XRP cannot be considered as such, because there is no “ investment contract » granting rights to investors or obliging thetransmitter to act in their interest.
The teams of Ripple claim that the SEC would do so out of all legislative framework. Here is the quote from that query:
“The SEC’s position would transform the sale of all types of ordinary assets – diamonds, gold, soybeans, cars and even works of art – in securities sales. Congress did not give the agency [la SEC] such authority.»
The DRY would eventually off topic and the token sale would not be within its scope of action. Ripple’s General Counsel, Stu Alderotydrive the point home:
“The filings show that the SEC is acting outside of its legal bounds. The SEC does not seek to enforce the law. It seeks to remake the law in the hope that it can impermissibly extend its jurisdiction.»
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The SEC sticks to its positions and considers them “titles”
the constable of the stock Exchange does he agree with this view of the facts ? Absolutely not ! It is based on an old system that has already proven itself: Howey’s test. It has been used since the 30s and allows – by answering a number of questionss – to determine if a asset can be considered a investment contract. And in this regard, the response of the regulator is crystal clear :
“The purchase of the token [XRP] is an investment in a company and a form of contract between Ripple and all holders of XRP. Additionally, investors expected to make a profit from buying the token. »
And the regulator goes on to point out “ Ripple’s many public statements about XRP” and emphasizing that ” Ripple funded its business by touting the profit potential of XRP“. The whole ” by selling and distributing XRP to public investors while keeping a large amount of XRP for itself“.
This is where we are a few days from the examination of the motion by the Court of the Southern District of Manhattan. Ripple’s CEO recently appeared rather confident on American television. He says he expects a dismissal of the case “in front of” indisputable facts“. For him, the judge has ” all the elements in hand to make this decision” and definitively affirm that ” the SEC greatly exceeds its authority“. For all XRP fans waiting for the end of hostilities, the end of the tunnel may not be far away. But while waiting for the good news, beware all the same of the scams that don’t spare their favorite token!
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The unloved of cryptocurrencies Ripple avoids the lawsuit of the century: what now?
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