Connect with us
[crypto-donation-box]

Blockchain

SEC loses a battle to win the war? Ripple dissociates from pumping XRP

Republished by Plato

Published

on

When the United States Securities and Exchange Commission filed legal action against Ripple Labs and its top-two executives in December, alleging that its XRP coin was in fact a security and that the firm had raised over $1.38 billion through an unregistered securities offering in 2013, many wondered if XRP would even survive

Some exchanges delisted XRP; some asset managers sold their XRP tokens. XRP had lost its place as the top 3 currency by market capitalization and was even looking like it could drop from the top 10. But reports of Ripple’s demise were spectacularly exaggerated.

As of mid-April, XRP had increased 532% over the previous 12 months, and things also took a favorable turn recently in the SEC lawsuit, with the defendants prevailing in two discovery rulings — even turning the tables on the regulatory agency by winning access to the SEC’s internal memos and minutes with regard to crypto discussions. “The SEC Is Now On Trial – And Knows It,” sounded Forbes.

But the lawsuit continues — indeed, it is being closely watched and has the potential to set legal precedents in a number of areas, Daniel Payne, partner in the fintech and blockchain practice at law firm Murphy & McGonigle, told Cointelegraph, including:

“The application of the statute of limitations to token sales; the extraterritorial reach of the securities laws to token sales on worldwide blockchains; the application of the securities laws to digital assets that FinCEN has regulated as a virtual currency [e.g., BTC]; and whether courts will use Bitcoin and Ether as models of non-security digital assets in their legal analysis.”

Therefore, while the defendants may have gained an edge in pre-trial rulings in SEC v. Ripple Labs, can one really say that Ripple’s legal troubles are over?

Not over till it’s over

“Not by a long shot,” Carol Goforth, the Clayton N. Little professor of law at the University of Arkansas (Fayetteville), told Cointelegraph. Ripple made a good case for accessing the SEC’s internal views on crypto — i.e., the first discovery ruling. And in the second contest:

“[Ripple executives] Garlinghouse and Larsen made a plausible argument that the SEC was over-reaching with its request for eight years of their personal bank records. As the insiders argued, why does the SEC need to know household expenditures in order to make its case?”

“However, although Ripple may discover information that will help its defense as a result of that ‘win,’ the extent to which this will matter in the long run is far from certain,” said Goforth. “The two recent pre-trial discovery rulings have shifted the playing field of the case,” added Payne. “The defendants have gotten traction with some important arguments, but that does not mean they have won the case.”

“It would be extremely premature to divine any significance from these interim ruling,” agreed David Chase, a securities lawyer and former SEC enforcement attorney. These are really discovery skirmishes and don’t go to the heart of the case, he told Cointelegraph.

“A different kind of case”

A recent article in The National Law Review noted regarding SEC v. Ripple Labs that “the SEC’s case rests on the proposition that XRP is a security — if it is not, the SEC lacks jurisdiction,” while Payne told Cointelegraph: “There are a handful of district court rulings that specific digital assets are securities: Telegram, Kik, ATBCoin, etc.” Those cases have provided important precedents that the SEC relies on now to police new token issuances that it believes are securities offerings. Continued Payne:

“But Ripple is a different kind of case. XRP was first sold over eight years ago, and over that time, the XRP ledger has become decentralized, while Ripple has, in large part, decoupled from XRP. But the SEC is alleging that XRP was and remains a security.”

John Wagster, an attorney at Frost Brown Todd, informed Cointelegraph that like almost every SEC action in the cryptocurrency space, the claims against Ripple “will be analyzed by market participants looking for a pathway to compliant token offerings,” adding: “A healthy market needs regulatory consistency, and the most meaningful outcome of the Ripple enforcement action would be one that provides a clear path forward for future issuances.”

Yuliya Guseva, professor of law at Rutgers Law School, told Cointelegraph that “the Ripple case is exceptionally important.” Even though it resembles the Kik and Telegram cases, the facts in SEC v. Ripple Labs are different. “The outcome of Ripple may have a profound effect on the crypto market. For one, the ultimate decision should provide more clarity to the developers and crypto community.” She added:

“The decision may reveal if we have transitioned from the bygone era of ICOs and related enforcement to a more mature market phase with a more nuanced doctrinal approach to cryptocurrencies.”

Regarding the discovery ruling, Chase is interested to see the SEC’s internal discussions about XRP and cryptocurrencies among the trove of documents now expected to emerge. “It usually runs just one way” — i.e., companies delivering their documents to the court. But in this case, it is the SEC that has to produce the goods — not a “typical” turn of events for the agency, suggested Chase.

What is propelling XRP price upward?

But what is one to make of the run-up in XRP’s market price in the past year — even before the discovery rulings. “XRP price’s journey to $1 this year has been nothing short of spectacular, considering the ongoing Securities and Exchange Commission lawsuit against Ripple initiated in December 2020,” commented Cointelegraph Markets contributor Marcel Pechman. In the weekend following the pre-trial rulings, XRP added over 40%, standing at around $1.3 on April 18, while almost reaching the $2 mark on April 14.

Wagster told Cointelegraph that the increase in XRP’s market price over the past year has more to do with bullishness in crypto markets generally rather than anything specific to XRP, while Chase opined: “Maybe what we’re seeing is the free market in operation.” The SEC’s lawsuit “is just another data point to be taken into account” in an evaluation of XRP; investors could even be handicapping an eventual settlement with the agency.

There may be another interpretation: Maybe the SEC’s decisions just don’t matter that much anymore when it comes to globally traded cryptocurrencies. Goforth disagrees. The SEC still plays a large role in regulating U.S. exchanges and other businesses, she said, while Payne noted that “if a cryptocurrency has a touchpoint within the U.S., the SEC has an argument that it can assert jurisdiction.”

Related: You don’t own me: XRP price surge defies SEC’s clamp-down on crypto

He did allow, however, “that XRP is traded worldwide, where many purchasers may be unaware of the SEC’s case,” which may have something to do with XRP’s price resilience. The price may also be affected by “purchasers who are betting that Ripple will win [the SEC case] and are trying to buy low.”

The U.S. Supreme Court provided the framework to determine whether an asset is a security in SEC v. Howey Co. “The Court explained that an asset is a security if it represents an investment in a common enterprise with the expectation of profits derived solely from the efforts of others,” recounted The National Law Review. The SEC has been applying the 71-year-old Howey Test ever since, and in its Ripple Labs complaint, the agency said XRP should be considered a security — explained the journal — because:

“Investors who purchased XRP anticipated that profits would be dependent upon Ripple’s efforts to manage and develop the market for XRP. Ripple has disputed the SEC’s allegations, arguing that XRP is a ‘fully functioning currency that offers a better alternative to Bitcoin.’”

Goforth further explained: “If the cryptoasset is truly decentralized so that there is no ‘other’ upon whom purchasers are relying, the Howey Test is not met.” That is, the coin or token would not be considered a security, as happened with Bitcoin (BTC) and Ether (ETH). “In the case of an asset like XRP, where the creator/issuer owns the bulk of the asset, controls its distribution, and is primarily responsible for its utility and potential profitability, it is easy to see how purchasers could be relying on the creator/issuer.”

Typically, SEC enforcement actions target issuers who are engaging in obviously fraudulent or corrupt behavior or target a specific activity they are hoping to dissuade, noted Wagster, adding: “The action against Ripple appears to target the promotional activity Ripple undertook when selling its tokens.”

“Ripple does not want to face the regulatory burdens of registering XRP as a security when Bitcoin and Ether appear to have escaped that fate,” said Payne, adding: “The question of how similar XRP is to Bitcoin and Ether today — as opposed to when they were first created — and whether the court even views that comparison as the right one could make or break this case.”

Meanwhile, even if the court decides that XRP is unlike Bitcoin and Ether — and has to be registered in the U.S. as a security — “that does not necessarily make the XRP token worthless,” suggested Goforth. “The real question would be what kind of final order the SEC might accept if it is clear that the court is going to find that XRP was sold as an investment and was, therefore, a security. If we analogize to SEC v. Kik” (another case where tokens [e.g., Kin] were issued by a company), then:

“Ripple might be permitted to continue operating with limitations on the right of the company and its founders to sell additional tokens. Just as Kik is required to notify the SEC of trades, a similar obligation might be imposed on Ripple and its current and former CEO.”

“On the other hand, if the SEC insists on registration, it will be up to Ripple to decide if that makes financial sense. If it does, a registered token will actually have more value and be more readily traded, so that could be a real win for investors,” said Goforth.

And if the SEC loses? Wagster told Cointelegraph: “No matter the outcome of the SEC’s complaint against Ripple, the SEC will continue to be one of the primary regulators of cryptocurrency in the United States.”

The wheel of fortune rises and falls

Even if Ripple prevailed in round one, it hasn’t won the match. As Wagster told Cointelegraph: “The U.S. District Court’s recent rulings are certainly favorable to Ripple, but the game is far from over. The SEC tends to choose its cryptocurrency targets carefully.” Moreover, he added:

“Once the SEC decides to move forward with a high-profile enforcement action, it would be embarrassing for them to back down without some sort of victory. I expect them to continue to pursue their claims against Ripple with zeal.”

There was a time when people thought that Ripple Labs, not Coinbase, would be the first crypto-native firm to be listed by a major U.S. stock exchange. Coinbase went public this past week on the Nasdaq exchange with a well-subscribed offering that drew comparisons with Facebook’s and Airbnb’s public debuts. Perhaps Ripple’s destiny is not to make historic waves on Wall Street, but rather in the courts — i.e., helping to clarify the rules that will prevail in the expanding cryptoverse.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cointelegraph.com/news/sec-loses-a-battle-to-win-the-war-ripple-dissociates-from-pumping-xrp

Blockchain

DOGE is Young People’s Middle Finger to the System, Says Mike Novogratz

Republished by Plato

Published

on

Mike Novogratz, in a research report, stated that Dogecoin is “the most honest shitcoin”, calling it a “store of value” for young people wishing to express a “little bit of a middle finger to the system”.

Dogecoin’s Recent Price Action

DOGE has entered a steep and stunning climb during the past few months, going from mere pennies to over $0.65. Young people betting on the speculative and volatile crypto asset have made staggering amounts of money thanks to the recent insane rate of return.

Many theorize that this rise has been fueled by Tesla founder and business mogul Elon Musk, who often refers to Dogecoin on his infamous Twitter profile, tweeting in a (usually) positive manner. Oftentimes when an “Elon tweet” comes out regarding Dogecoin, it gives a nice little boost to the price.

Most recently, Elon Musk revealed that he would be hosting SNL, dropping a single hint: Dogefather. This enigmatic message has spurred thousands of young people worldwide to invest in DOGE, which, although extremely risky, has been facing undeniably bullish price action as of late. Will Elon Musk’s SNL special provide the fuel needed for DOGE to power through to over a dollar, or will it be a ‘sell the news’ event?

Novogratz Draws Parallels to GME

Novogratz, in his interview, urged people to “listen to what Dogecoin is saying”, as he sees it as very comparable to the GameStop fiasco (where a group of young retail traders pushed GME to new heights, partially in an attempt to liquidate hedge funds that were shorting the stock).


ADVERTISEMENT

“There is nihilism and excitement to it,” Novogratz stated, adding, “there’s something really pure about it.”

Indeed, Dogecoin is not a successful ‘company’ in the traditional sense, and there is little to no innovative development work going on behind the scenes, but we’ve seen (in the stock market, for example) that the power of the masses if placed behind a single unifying idea, can work wonders.

It’s a massive game of tug of war — whether or not Dogecoin can sustain this dizzying momentum remains to be seen. One thing is for sure: millions of people will be tuning in to watch SNL this week.

SPECIAL OFFER (Sponsored)

Binance Futures 50 USDT FREE Voucher: Use this link to register & get 10% off fees and 50 USDT when trading 500 USDT (limited offer).

PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to get 50% free bonus on any deposit up to 1 BTC.

You Might Also Like:


Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptopotato.com/doge-is-young-peoples-middle-finger-to-the-system-says-mike-novogratz/

Continue Reading

Blockchain

Latin America’s Biggest Online Marketplace, MercadoLibre, Disclosed Bitcoin Holdings

Republished by Plato

Published

on

On a financial results report dated May 5th, e-commerce giant MercadoLibre dropped the bomb. The company is the latest institution to add Bitcoin to its balance sheet. It follows MicroStrategy, Square, and Tesla’s highly covered buys. Bitcoin’s institutional adoption is in its infancy, but advancing non-stop.

In the financial highlights for 2021’s First Quarter, the company wrote a succinct:

As part of our treasury strategy this quarter we purchased $7.8 million in bitcoin, a digital asset that we are disclosing within our indefinite-lived intangible assets.

A modest allocation, considering MercadoLibre has almost $4B in assets, a cash reserve of $1.1B. It also has a market capitalization of approximately $76B. However, the move might be part of a bigger plan. The company recently opened a section on their website dedicated to real state commerce in Bitcoin and Bitcoin only. The pilot program includes 75 properties and 7 real state agencies willing to accept the cryptocurrency.

Related Reading | JPMorgan Partners With Singapore’s DBS to Launch Blockchain-Based Payment Platform

The Bitcoin-on-the-balance-sheet club

The investment puts MercadoLibre in a pretty exclusive club. The institutional adoption pioneer was MicroStrategy, a company that then issued bonds to buy even more Bitcoin. Twice. At the time, Bitcoinist reported:

Microstrategy announced today that it purchased $15 million worth of Bitcoin. The company’s CEO, Michael Saylor, tweeted this morning that his company had bought approximately 253 BTC, bringing its total holdings to about 91,579 BTC.

After that, Square announced a moderate buy of $50M worth of Bitcoin, and months later another one of $170M. It’s worth noting that the company buys and sells BTC through their flagship product CashApp. And that it keeps buying more. Six months ago, Bitcoinist reported:

Ikigai Asset Management’s Hans Hague recently noted that per his analysis, Square and Grayscale alone have accumulated $2.3 billion worth of Bitcoin in the past quarter.

The biggest player of all, of course, is Elon Musk’s Tesla. Reports that the company made more money from that investment than for selling cars are all over the Internet. In any case, Tesla made a big splash when it entered the space. Bitcoinist reported:

Traders flocked into the cryptocurrency market a day after American carmaker Tesla announced that it had purchased $1.5bn worth of Bitcoin as “alternative reserve assets” to their cash holdings.

In its filing with the Securities and Exchange Commission, Tesla said it plans to buy more Bitcoin in the future and—maybe—even enable its use as a medium of payment for its products and services.

MercadoLibre stock chart

MercadoLibre stock chart | Source: MELI on TradingView.com

Related Reading | Southampton FC Extend Partnership Deal with Blockchain Leader The Coingaming Group

More about MercadoLibre

It may not be a big name in the European and North American markets, but MercadoLibre is ubiquitous in Latin America. The company operates in:

  • Argentina
  • Brazil
  • Chile
  • Uruguay
  • Mexico
  • Spain
  • Bolivia
  • Venezuela
  • Colombia
  • Ecuador
  • Peru
  • Costa Rica
  • Dominican Republic
  • Guatemala
  • Honduras
  • Panama

In the quoted financial results report, they describe themselves as: 

Founded in 1999, MercadoLibre is the largest online commerce ecosystem in Latin America, serving as an integrated regional platform and as a provider of the necessary digital and technology-based tools that allow businesses and individuals to trade products and services in the region. The Company enables commerce through its marketplace platform which allows users to buy and sell in most of Latin America.

A question remains, will Bitcoin holdings make MercadoLibre’s stock rise?

Featured Image by Mark König on Unsplash - Charts: TradingView

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://bitcoinist.com/latin-americas-biggest-online-marketplace-mercadolibre-disclosed-bitcoin-holdings/?utm_source=rss&utm_medium=rss&utm_campaign=latin-americas-biggest-online-marketplace-mercadolibre-disclosed-bitcoin-holdings

Continue Reading

Blockchain

Novogratz’s Galaxy Digital set to acquire BitGo for $1.2B

Republished by Plato

Published

on

Galaxy Digital is in the process of acquiring BitGo for $1.2 billion, which would be settled in stock and cash

Galaxy Digital, the firm owned by popular investor Mike Novogratz, is set to acquire BitGo, a leading independent digital assets infrastructure provider. The deal is worth roughly $1.2 billion and will be paid in both stock and cash.

In a press release yesterday Galaxy Digital said, “The acquisition will position Galaxy Digital as a leading global full-service platform for institutions seeking access to the crypto economy, offering an unparalleled breadth of industry-leading products and services at scale.”

Several reports surfaced last month, suggesting that the two companies are in advanced talks regarding an acquisition. Mike Novogratz, CEO and Founder of Galaxy Digital, said the acquisition of BitGo would turn his company into a one-stop-shop for institutions, boosting their efforts to institutionalise digital asset ecosystems and blockchain technology. Novogratz added, “The power of the technology, solutions, and people we will have as a result of this acquisition will unlock unique value for our clients and drive long-term growth for our combined business. We are excited to welcome Mike Belshe and the talented BitGo team to Galaxy Digital.”

Per the terms of the agreement, BitGo shareholders are set to receive 33.8 million newly issued shares of Galaxy Digital common stock. Furthermore, they will be paid $265 million in cash, which brings the total value of the deal to approximately $1.2 billion.

BitGo is one of the leading regulated custodians in the cryptocurrency sector. It currently provides services to over 150 exchanges and 400 institutional clients. BitGo controls over $40 billion in assets under management by supporting the custody of over 400 coins and tokens.  BitGo CEO and Founder Mike Belshe said joining Galaxy Digital is an exciting new chapter for the company, allowing their clients to access a wide set of financial solutions.

Galaxy Digital planning to go public in the US

Galaxy Digital is a publicly-listed company in Canada. However, the firm is planning to officially list on a US stock exchange this year. In that regard, the company’s board of directors approved a proposed reorganisation and domestication designed to help the company achieve its goal of going public in the United States.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://coinjournal.net/news/novogratzs-galaxy-digital-set-to-acquire-bitgo-for-1-2b/

Continue Reading
Blockchain3 days ago

Mastercard adds 6 blockchain payments startups to accelerator program

Blockchain22 hours ago

Major Law Firm CMS Adds Stratis (STRAX) to its Legal Accelerator Program

Blockchain2 days ago

Starcoll To Issue Limited Edition Star Wars Collectibles as NFTs

Blockchain2 days ago

Pro traders buy the Bitcoin price dip while retail investors chase altcoins

Blockchain2 days ago

eBay could add a crypto payment option, says CEO

Blockchain3 days ago

S&P DJI Releases Bitcoin and Ethereum Indexes

Blockchain1 day ago

China’s Central Bank to Partner With Alibaba’s Ant Group on Digital Yuan

Blockchain2 days ago

‘This ain’t no game’ as DOGE briefly flippens Nintendo and takes #4 spot from XRP

Blockchain3 days ago

Iranian companies can now pay for imports with officially mined cryptocurrencies.

Blockchain2 days ago

Bitcoin Miners Moving Away from China, F2Pool Observes

Blockchain1 day ago

Here Is Why XRP Volume Has Recover Across Payment Corridors

Blockchain3 days ago

CBDCs Could Harm Bitcoin But BTC May Replace Gold as a Store of Value: Deutsche Bank

Blockchain2 days ago

S&P launches cryptocurrency indexes, debuting with Bitcoin and Ether

Blockchain2 days ago

Another XRP lawsuit update: SEC accuses XRP Holders of ‘reciting’ Ripple’s litigation position

Blockchain2 days ago

Singapore’s largest bank posts tenfold crypto volume growth in Q1 2021

Blockchain2 days ago

The Reason for Ethereum’s Recent Rally to ATH According to Changpeng Zhao

Blockchain2 days ago

Bybit Launches Ether (ETH) Cloud Mining Service as Demand Booms

Blockchain3 days ago

Qredo raises $11M in seed funding to launch new cross-chain asset management infrastructure

Blockchain2 days ago

eBay is Considering Adding Crypto Payments & NFT Sales

Blockchain2 days ago

Bitcoin and Ethereum Indices Debut on S&P Dow Jones

Trending