With XRP up at one dollar and change, experiencing what William Suberg at Cointelegraph calls the Santa rally, it’s time to take a fresh look at the major stumbling block in Ripple’s path in the form of allegations by the SEC.
Months ago, we were reporting on that agency’s aggressive litigation of Ripple’s sale of the XRP token in New York courts.
Gary Gensler, incoming as the head of the SEC this year, blasted a range of altcoins as potential securities, and suggested tighter regulations are coming.
Now, however, it seems that the SEC’s case is on shaky ground for some very interesting reasons.
Charles Gasparino explains it well in a New York Post article:
“The SEC case hinges on some allegedly bad stuff done by Ripple,” Gasparino writes. “The SEC says Ripple execs sold an unregistered cryptocurrency called XRP to get rich and finance the build-out of its blockchain-like platform that transacts cross-border payments. The SEC says the XRP sales were no different from a company selling a stock or bond, and were illegal because they weren’t registered with the commission. Ripple counters that the SEC is creating a legal double standard. The XRP sales were legal because XRP is not that much different from other non-registered cryptos, industry heavyweights such as Ether and Bitcoin.”
Here’s where it gets interesting: Gasparino starts to draw lines between the SEC’s position on BTC and ETH, and what it says about Ripple.
“The SEC seemed to officially declare Bitcoin and Ethereum’s Ether a compliant crypto in a 2018 speech by Bill Hinman, the former head of the SEC Corporation Finance Division,” he writes. “Ripple’s defense hinges in part on using Hinman’s words against the commission; XRP was used in the same way the Ethereum people used Ether to finance the initial build-out of their platform. So what’s the beef? … The commission is now arguing that whatever Hinman said, his speech meant nothing. It’s simply his opinion, nothing more. In court, the SEC is telling the crypto world it really hasn’t made an official ruling whether Bitcoin or Ethereum’s Ether comport with securities laws.”
Gasparino then quotes the SEC’s legal counsel as saying that, well, they never really said that Bitcoin and Ethereum are legal. This assertion, as Gasparino points out, is farcical. But there’s more.
Here’s one of the major bombshells that Ripple advocates are weaponizing against the SEC.
It turns out that Jay Clayton, former SEC Chairman, now works as an advisor for One River Asset Management and that One River has operational incentives related to both Bitcoin and Ethereum, but not other altcoins.
By most accounts this type of thing is an egregious and evident conflict of interest. Ripple is, meanwhile, making a lot of headway in convincing courts and others that XRP is more like Bitcoin Ethereum than the SEC would prefer to believe.
With that in mind, we see big changes happening for what used to be the third runner-up cryptocurrency!
Stay tuned…