SNEAK PEEK

• Initial sales of XRP may be considered in violation of securities laws, potentially setting a precedent for the SEC to pursue other companies.
• The court’s ruling on whether XRP should be classified as a security and how to handle the classification of early sales will be crucial.
• Jesse Hynes believes the court will ultimately rule in favour of Ripple, stating that their current sales methods do not violate securities laws.

Recent news by Jesse Hynes states that the initial sales of XRP may be deemed in violation of securities laws. This could potentially establish a precedent for the Securities and Exchange Commission (SEC) to pursue other companies. Furthermore, when a product is sold to raise funds, it can be considered as creating an investment agreement.

Early day sales of XRP will be found to have violated securities laws. This will set a precedent that the SEC will use to go after many other companies. Essentially if you sell something for fundraising, then you have created an investment contract.

— Jesse Hynes 🌱 (@jesse_hynes) May 22, 2023

Furthermore, he expressed his belief that the court will ultimately rule in favour of Ripple, stating that their current sales methods do not violate security laws. The key issue is whether the court will address whether XRP should be classified as a security and how to handle the classification of early sales as securities.

Additional reports suggest that the fair notice defence will only be applicable if it is established that there was an investment contract in place. In this context, Ripple could potentially mount a strong defence by claiming that no fair notice was provided to them. It’s important to note that this defence primarily benefits Ripple rather than its users.

Jesse Hynes responded to a tweet concerning whether he had read the Blue Sky laws. He said he was very familiar with the laws. Furthermore, he added that they apply to securities issuers who have intentionally issued securities. The blue sky laws do not comply with unregistered securities. 

Furthermore, Jesse claimed that Twitter has a limit. He asserted that he had gone into depth in many threads of how it works. He says that he expects those who read the threads to read them in light of what is being discussed. In this case, it’s a company selling a digital asset to fundraise its business using that asset. In addition to that, there are many things you can sell, and there is no investment contract.