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Ripple Vs SEC

XRP Lawsuit: Ripple Response to SEC’s Privileged Documents Argument

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  • Ripple responded to the SEC’s brief regarding the alleged privileged documents.
  • Lawsuit was highlighted by the Ripple revelation of the plaintiff’s 2018 XRP analysis.

Ripple responded to the SEC’s brief regarding the alleged privileged documents which the SEC withheld in the latest XRP’s lawsuit update. Moreover, Ripple argues against SEC’s repetitive ‘privileged’ stance to safeguard discovery and review of evasive documents to the case.

Ripple asserts that the SEC continues to make the same argument in its response. It indicates that the Court rejected the lawsuit repeatedly for “targeted letter briefs on those documents”.

The lawsuit was highlighted by a revelation by Ripple of the plaintiff’s 2018 XRP analysis. This proved that SEC’s numerous versions of the privilege argument are unsustainable. In fact, Ripple reported that an analysis of XRP’s legality was offered to a group at the SEC. This happened just a day after the controversial Hinman speech of 2018.

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Moreover, XRP legal analysis was also discredited by Ripple under three claims in the SEC’s logged privilege documents. According to the defendants, the SEC cannot assert attorney-client privilege against the mentioned documents, since they are not working documents.

Ripple maintains that the allegedly incriminating documents were never part of the SEC’s investigation file, as the SEC now appears to be claiming. More so, the documents related to an investigation are already covered by the SEC’s categorical privilege log, thus, no further documentation would be required.

As well, XRP’s legal analysis documents have an anonymous author, and the SEC has not disclosed the timeframe of the drafting. There are no details available about it, except to say that it was prepared before the Hinman speech of 2018.  Also, it was sent by the Office of the Chief Counsel in the Division of Corporate Finance.

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To clarify, the SEC reveals it does not assert that this memorandum was drafted upon the instruction of Enforcement counsel given the litigation. Rather, it was sent to a single enforcement counsel and nine others who were not at Enforcement.

Furthermore, the document added, that the Department of Corporation Finance had a duty to consider XRP’s status under securities laws in an independent manner from whether the Division of Enforcement had a duty to recommend an action to the Commission.

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Ripple Vs SEC

Inside the Ripple vs. SEC saga: Investigation reveals new details of personal interests at the SEC

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  • An investigation by FOX Business has revealed new tie-ups in the SEC vs. Ripple case, including Gensler’s huge role before he joined the SEC.
  • Andreessen Horowitz has also been identified as one of the key players protecting Ethereum and nudging the SEC on which way to regulate the space.

Eleven months ago, almost to the day, the U.S Securities and Exchange Commission (SEC) sued Ripple Labs for violating securities regulations with its sale of the XRP token. It also sued Brad Garlinghouse and Chris Larsen, the CEO and Chairman of the firm respectively, for facilitating this violation and benefitting personally from it. Since then, it’s been a lengthy legal battle that doesn’t seem to be ending soon.

But were the charges motivated by personal interests? Are there higher powers that are protecting the other projects, especially Ethereum? Was Ripple identified as the cheap target of the enforcement despite working extensively with the SEC to prove it had abided by the law? FOX Business believes so, and in its latest investigation, it made out links between Gary Gensler, Bill Hinman, Jay Clayton, Joe Lubin, Andreessen Horowitz and other powerful players that span back to over three years ago.

Jay Clayton

The biggest factor in the saga is Clayton, the former SEC head who in his last act filed the lawsuit against Ripple (literally hours before he left office). Clayton had been a Wall Street lawyer who, as a Republican, advocated for a free market. In fact, in his time at the SEC, most of the 65 new rules he passed were towards deregulation.

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Prior to his action against Ripple, Clayton had brought 87 actions against cryptocurrency businesses. Most of these were charges of selling unregistered securities, with the two standouts being Telegram and Kik. The former had conducted a $1.7 billion token sale, one of the largest ever and had to return $1.2 billion to investors and shut down.

The investigation unearthed that in January 2018, Clayton had asked Andreessen Horowitz, one of the world’s most renowned venture capital firms, to organize a summit of cryptocurrency leaders. The purpose of the summit was for the leaders to weigh in on regulations and make recommendations to the SEC.

Sources with knowledge of the matter revealed that Ethereum was vastly represented, with several members of the Ethereum Enterprise Alliance in attendance.

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One lawyer who attended the summit, Lowell Ness, later detailed that Clayton had told Andreessen to “round up the industry players to essentially lay out a very detailed written, foot-noted memo on what existing law says about utility tokens” and “give a proposal about where to go from here.”

Ripple executives, or their affiliates, were not invited to this summit.

This summit may sound like just another random event. But a year later, one of the lawyers present in this meeting was in a panel discussion in which he took partial credit for the now-very-famous Bill Hinman speech in 2018. This was the speech in which Hinman, who was a top SEC official, said Ether and BTC weren’t securities. He didn’t exempt any other cryptocurrency.

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The lawyer, Nancy Wojtas of Cooley LLP, stated in part that “director Hinman’s speech … most of what he says in there came out of the safe harbor as well as the meetings we had with him.”

Was it a coincidence that Hinman exempted Ethereum after holding a summit with top Ethereum advocates?

Gary Gensler

Just as important to the Ripple saga is Gary Gensler, the current SEC head and former CFTC chairman. Sources have revealed that even before joining the SEC, Gensler was just as involved in laying out regulations meant for the cryptocurrency industry.

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The first meeting was in March 2018. While all the details about the meeting have not been disclosed yet, sources say Gensler asked Clayton to take an even harsher stance on digital assets.

From the onset, Gensler had made up his mind that Bitcoin was not a security under the Howey test. Ethereum, on the other hand, wasn’t as clear-cut as BTC. Ripple’s XRP for him was an obvious security, even before the case against the company.

He told the New York Times in 2018:

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There is a strong case for both of them — but particularly Ripple — that they are noncompliant securities.

Days after the first meeting, Clayton stated in a town hall meeting in Atlanta,  “Most of what I’ve seen in the ICO space is a securities offering. It is raising money for a project where I give you my money, you give me some type of write-back that reflects a return on your project. That’s a securities offering.”

That first meeting isn’t the most controversial one, however. On December 21 last year, Gensler met Clayton once again. On his public schedule, Clayton detailed the sitdowns as “Meeting with Gary Gensler, president-elect Joe Biden’s transition team.”

The most striking thing about this meeting, in particular, was that it was one day before Clayton and the SEC charged Ripple with securities violations.

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SEC giving Ethereum and Bitcoin a “hall pass”

Ripple has accused the SEC of bias and picking the winners and losers in the cryptocurrency industry. Garlinghouse, the CEO, has openly accused Clayton, and now Gensler, of playing favorites and giving Bitcoin and Ether a hall pass.

And it’s not hard to see why the California company feels it’s being targeted, especially vis-a-vis Ethereum. The Ethereum founders held an ICO as well and Vitalik has been quite involved in developing the platform up to date, including championing for Ethereum 2.0.

Joe Lubin, the other Ethereum co-founder has been open about the project’s lobbying with regulators. He has, over the years, touted the close ties that the Ethereum family has kept with the SEC.

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For instance, he once talked about how “Bitcoin and Ethereum arrived before regulators were paying attention” and that “we were fortunate enough to frame our token as a utility token” while “others will be seen as securities.”

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Ripple

Inside the Ripple vs. SEC saga: Investigation reveals new details of personal interests at the SEC

Published

on

ripple-v-SEC
  • An investigation by FOX Business has revealed new tie-ups in the SEC vs. Ripple case, including Gensler’s huge role before he joined the SEC.
  • Andreessen Horowitz has also been identified as one of the key players protecting Ethereum and nudging the SEC on which way to regulate the space.

Eleven months ago, almost to the day, the U.S Securities and Exchange Commission (SEC) sued Ripple Labs for violating securities regulations with its sale of the XRP token. It also sued Brad Garlinghouse and Chris Larsen, the CEO and Chairman of the firm respectively, for facilitating this violation and benefitting personally from it. Since then, it’s been a lengthy legal battle that doesn’t seem to be ending soon.

But were the charges motivated by personal interests? Are there higher powers that are protecting the other projects, especially Ethereum? Was Ripple identified as the cheap target of the enforcement despite working extensively with the SEC to prove it had abided by the law? FOX Business believes so, and in its latest investigation, it made out links between Gary Gensler, Bill Hinman, Jay Clayton, Joe Lubin, Andreessen Horowitz and other powerful players that span back to over three years ago.

Jay Clayton

The biggest factor in the saga is Clayton, the former SEC head who in his last act filed the lawsuit against Ripple (literally hours before he left office). Clayton had been a Wall Street lawyer who, as a Republican, advocated for a free market. In fact, in his time at the SEC, most of the 65 new rules he passed were towards deregulation.

Advertisement

Prior to his action against Ripple, Clayton had brought 87 actions against cryptocurrency businesses. Most of these were charges of selling unregistered securities, with the two standouts being Telegram and Kik. The former had conducted a $1.7 billion token sale, one of the largest ever and had to return $1.2 billion to investors and shut down.

The investigation unearthed that in January 2018, Clayton had asked Andreessen Horowitz, one of the world’s most renowned venture capital firms, to organize a summit of cryptocurrency leaders. The purpose of the summit was for the leaders to weigh in on regulations and make recommendations to the SEC.

Sources with knowledge of the matter revealed that Ethereum was vastly represented, with several members of the Ethereum Enterprise Alliance in attendance.

Advertisement

One lawyer who attended the summit, Lowell Ness, later detailed that Clayton had told Andreessen to “round up the industry players to essentially lay out a very detailed written, foot-noted memo on what existing law says about utility tokens” and “give a proposal about where to go from here.”

Ripple executives, or their affiliates, were not invited to this summit.

This summit may sound like just another random event. But a year later, one of the lawyers present in this meeting was in a panel discussion in which he took partial credit for the now-very-famous Bill Hinman speech in 2018. This was the speech in which Hinman, who was a top SEC official, said Ether and BTC weren’t securities. He didn’t exempt any other cryptocurrency.

Advertisement

The lawyer, Nancy Wojtas of Cooley LLP, stated in part that “director Hinman’s speech … most of what he says in there came out of the safe harbor as well as the meetings we had with him.”

Was it a coincidence that Hinman exempted Ethereum after holding a summit with top Ethereum advocates?

Gary Gensler

Just as important to the Ripple saga is Gary Gensler, the current SEC head and former CFTC chairman. Sources have revealed that even before joining the SEC, Gensler was just as involved in laying out regulations meant for the cryptocurrency industry.

Advertisement

The first meeting was in March 2018. While all the details about the meeting have not been disclosed yet, sources say Gensler asked Clayton to take an even harsher stance on digital assets.

From the onset, Gensler had made up his mind that Bitcoin was not a security under the Howey test. Ethereum, on the other hand, wasn’t as clear-cut as BTC. Ripple’s XRP for him was an obvious security, even before the case against the company.

He told the New York Times in 2018:

Advertisement

There is a strong case for both of them — but particularly Ripple — that they are noncompliant securities.

Days after the first meeting, Clayton stated in a town hall meeting in Atlanta,  “Most of what I’ve seen in the ICO space is a securities offering. It is raising money for a project where I give you my money, you give me some type of write-back that reflects a return on your project. That’s a securities offering.”

That first meeting isn’t the most controversial one, however. On December 21 last year, Gensler met Clayton once again. On his public schedule, Clayton detailed the sitdowns as “Meeting with Gary Gensler, president-elect Joe Biden’s transition team.”

Advertisement

The most striking thing about this meeting, in particular, was that it was one day before Clayton and the SEC charged Ripple with securities violations.

SEC giving Ethereum and Bitcoin a “hall pass”

Ripple has accused the SEC of bias and picking the winners and losers in the cryptocurrency industry. Garlinghouse, the CEO, has openly accused Clayton, and now Gensler, of playing favorites and giving Bitcoin and Ether a hall pass.

And it’s not hard to see why the California company feels it’s being targeted, especially vis-a-vis Ethereum. The Ethereum founders held an ICO as well and Vitalik has been quite involved in developing the platform up to date, including championing for Ethereum 2.0.

Advertisement

Joe Lubin, the other Ethereum co-founder has been open about the project’s lobbying with regulators. He has, over the years, touted the close ties that the Ethereum family has kept with the SEC.

For instance, he once talked about how “Bitcoin and Ethereum arrived before regulators were paying attention” and that “we were fortunate enough to frame our token as a utility token” while “others will be seen as securities.”

News Source

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Ripple Vs SEC

SEC v. Ripple case makes “good progress” to reach conclusion next year, says CEO Brad Garlinghouse

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  • Ripple’s CEO has recently shared the payment giant’s progress in the SEC vs. Ripple case.
  • Ripple announces partnership with the Republic of Palau to help the country explore its first national digital currency.
  • Ripple forays into NFTs with a $250 million fund as it partners with mintable, VSA partners and mintNFT.

Ripple CEO shares the payment giant’s progress in the SEC vs. Ripple case. The firm is making strides with new partnerships, powering the national digital currency of the Republic of Palau. 

SEC vs. Ripple case expected to close in 2022 with positive outcome

In a recent interview, Brad Garlinghouse, CEO of Ripple, told CNBC that the payment giant is making strides in court proceedings in the SEC vs. Ripple case. 

Garlinghouse said, 

We’re seeing pretty good progress despite a slow-moving judicial process. Clearly we’re seeing good questions asked by the judge. And I think the judge realizes this is not just about Ripple, this will have broader implications.

The Securities & Exchange Commission (SEC) has raised concerns about the payment giant’s close ties with XRP. Ripple is the largest public holder of the altcoin, and the proceedings in the case against the firm have impacted the cryptocurrency’s price. 

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Ripple’s On-Demand Liquidity (ODL) corridor uses XRP to facilitate cross-border transactions for clients at a lower cost. This has raised flags for regulators, as the SEC suspects that $1.3 billion XRP was sold as an unregistered securities offering. 

Proponents on crypto Twitter argue that the outcome of the SEC vs. Ripple case would have broader implications for Ethereum and other cryptocurrencies in the market. 

Alongside the legal proceedings, Ripple has now partnered with the Republic of Palau, an island country, to power a national digital currency. Ripple has previously worked with Asian countries, partnering with them to provide liquidity through the ODL corridor or power national digital currencies, like in the case of Bhutan. 

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The payment giant is struggling to remain relevant as most competitors foray into NFTs and the metaverse. Ripple announced a $250 million fund in partnership with mintable, VSA partners and mintNFT to support creators and marketplaces working on NFT projects. 

FXStreet analysts have evaluated the XRP price trend and predicted that the altcoin will see fireworks if it moves above $1.2. 

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