Judge Hands SEC a Massive Loss Denying Theory That Tokens Are Always Securities

The Breakdown

Blockworks

Investing, Business

4.8 • 806 Ratings

🗓️ 14 July 2023

⏱️ 19 minutes

🔗️ Recording | iTunes | RSS

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Summary

The judge has handed a summary decision in the Ripple-SEC case, and while it was a mixed decision, the reality is that the SEC's position is much weaker today than it was yesterday. NLW runs down the ruling and what people think the implications might be. Enjoying this content? SUBSCRIBE to the Podcast: https://pod.link/1438693620 Watch on YouTube: https://www.youtube.com/nathanielwhittemorecrypto Subscribeto the newsletter: https://breakdown.beehiiv.com/ Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW

Transcript

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0:00.0	Welcome back to The Breakdown with me, NLW.
0:09.3	It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world.
0:18.4	What's going on, guys? It is Friday, July 14th, and today we are talking about a significant decision in a big, big court case when it comes to the crypto industry.
0:29.5	Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link of the show notes or go to bit.
0:40.4	ly slash breakdown pod. All right, friends, some massive news to close out the week.
0:46.7	One of the most significant cases the crypto industry has been fighting with the SEC has been
0:51.8	ruled upon. And while it may not be a total slam dunk, the at least
0:56.1	partial victory is still massively significant and weakens the SEC's arguments in other cases
1:01.4	in fairly fundamental ways. So let's get into the details and then we'll move on to what it all
1:06.6	means. TLDR, Ripple chalked up a major success in their defense against the SEC on Thursday.
1:12.6	The judge in the case granted them a partial victory on multiple issues surrounding the sale of
1:16.8	XRP tokens. The judge found that, in some circumstances, the sale of XRP tokens were not
1:21.9	breaches of securities law. Sale of tokens into the open market did not qualify as the sale of
1:26.6	unregistered securities. However, the sale of tokens to institutional open market did not qualify as the sale of unregistered securities.
1:27.9	However, the sale of tokens to institutional investors on fixed terms was ruled to be illegal.
1:32.9	Most importantly, the XRP tokens themselves were not to be considered securities on their own.
1:37.9	Everything instead was about the investment contract.
1:41.3	So, the court's decision was made on what's known as summary judgment. That means the judge
1:45.9	was only able to make a determination about whether the party's arguments were based on a correct
1:49.8	analysis of the law using a set of undisputed facts. Disputed and unclear facts will be explored
1:55.2	at a full trial in due course. And given how much this case and so much else that's happening
1:59.8	right now has to do with the definition of securities, it's worth a quick recap on the Howie Test.
	...

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