Cryptocurrencies entered the breakout year in 2021, and the market capitalization of cryptocurrencies exceeded $ 3 trillion for the first time. Since then, the value of cryptocurrencies has declined, but there is little suggestion that this is just one of the temporary problems that have occurred since 2011 during the remarkable decade-long rise in cryptocurrencies.
Now, more than ever, it’s clear that the use cases of digital assets and distributed ledger technology have taken blockchain for mainstream enterprise recruitment beyond mere speculation. In 2022, this notable technology growth path will continue to accelerate in the United States or be diverted overseas.
The speculation and uncertainty originally caused by the Trump administration’s failure to provide clear guidance on cryptocurrency regulation is through one of the Trump administration’s worst cryptocurrency moves, with Trump’s SEC being an enterprise blockchain software company. You can rest due to the false enforcement measures you have brought against Ripple’s cryptocurrency XRP.
Private investors lost $ 15 billion in the proceedings filed by the SEC in the name of investor protection. It then tests whether the SEC has the authority to regulate cryptocurrencies and whether it should be allowed to continue the dangerous approach of enforcement regulation.
The investment community wanted the Biden administration to prove a more stable move, provide regulatory guidance on the extent of the SEC’s authority over cryptocurrencies, and end false Ripple enforcement measures. But Biden’s choice for the SEC, Gary Gensler, instead doubled the mistakes of the previous administration.
Therefore, it seems that this year, the SEC’s enforcement authorities may have to be settled in court in a court battle between the SEC and its fierce battle target, Ripple. Southern New York, likely to reach the US Supreme Court.
At stake: Is XRP security?
At stake is whether XRP is “security” that must be registered with the SEC. For both Trump’s SEC and Biden, the Supreme Court is SEC vs. WJ Howey Co. , (1946), based on the test adopted, “security” is the issuer “others who promise profit.”
According to the SEC, XRP meets that definition just because Ripple creates and probably “uses” it.[s], “Money from” Other “in each batch of XRP it offers. And that position will give the SEC the omnipotent power over cryptocurrencies, as all issuers will benefit from the issuance of their cryptocurrencies.
But Ripple definitely finds a use for the money that XRP generates, HowieThe “security” touchstone is not what the issuer sells, but what the buyer buys, the promise of “profit.” Apple stock is “security” because it gives shareholders an investment in Apple’s business, and it gains value based on Apple’s business performance.
However, the value of XRP has nothing to do with Ripple’s performance.How its value is derived XRP will run it. It should keep cryptocurrencies beyond the scope of the SEC. Hopefully, the district court agrees that the Supreme Court will set important test cases that will allow the Supreme Court to resolve how its 75-year-old tests apply to revolutionary blockchain technology. Will do.
A new battle breaks out
This battle was barely hot, but another battle is on fire as Ripple introduced affirmative defense of fair notice, which is also important for the future of cryptography. Ripple claims that the SEC could not have expected to see all sales of XRP as a long line of unregistered securities transactions. There was no negative reaction, especially when the SEC first sought guidance, not when it began selling XRP without SEC concerns in 2013. Also, when XRP began to be listed on public commodity exchanges, there was no suggestion from the SEC that all listed transactions were illegal.
Ripple also said in 2018 that the SEC provided specific guidance to move the market through a speech by then-Director of Corporate Finance William Hinman that cryptocurrencies like Ethereum are not securities. And it makes a sudden about face a breach of due process. The SEC argued that it would not give guidance to crypto traders because of its apparently widespread authority, and called for its defense to be defeated from the case.
The district court’s ruling on that question is important not only to protect Ripple, its investors, and XRP buyers from billions of fines and invalidation of transactions, but also of the SEC’s omnipotence against cryptocurrencies. It is also important to curb a general stance.
Gensler should “come and discuss” digital registration with all past, present, and future crypto issuers, as the SEC’s authority is so broad at both parliamentary hearings and speeches. Faced with assets as securities or potential enforcement measures based on the SEC’s Ripple stance.Industry-leading voice say They are stunned: “How can a currency be safe?” But it hasn’t stopped Gensler.
Only the district court’s ruling allows the defense of Ripple’s fair notice to remain in the case and suppress these broad authority claims in order to ultimately succeed.That requires the Commission to abandon its subpoena governance stance and provide some guidance before taking future enforcement measures so that crypto developers can understand the rules of the game to some extent.
This article does not necessarily reflect the views of the State Department or its owners, who are the issuers of Bloomberg Law and Bloomberg Taxes.
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J. Karl Sesele Is the owner of Cecere PC, a law firm dedicated to the practice of the Supreme Court and appeals. The author states that Ripple has no interest or interest.
