On Saturday (October 8), Charles Hoskinson, co-founder and CEO of IO Global (a.k.a. “IOG”, formerly known as “IOHK”) announced the U.S. against crypto regulation in general and Ripple. Labs in particular shared their latest thoughts on the SEC lawsuit.
As you may remember, on December 22, 2020, the SEC announced announced The company has filed a lawsuit against Ripple Labs Inc. and two of its executives who are also significant security holders, alleging they raised more than $1.3 billion through an unregistered ongoing digital asset securities offering. ‘ said.
Hoskinson today. gave to twitter Explaining his stance on how crypto assets should be regulated in the United States, he makes it clear that he does not believe XRP is a security.
“The most surprising thing to me these days is how heavily I am being lashed out by some on the XRP side for my recent comments on SEC issues. I think I should explain a nuance that the Internet has always lacked… I’ve always taken the position that most layer 1 protocols are not security. It provides utilities, is decentralized enough to have operators and builders all over the world, and has survived the founder surpassing his Howie…
“Oil speculators, like baseball cards, don’t trade oil into securities. You can always securitize oil or baseball cards, but then you obviously have an information asymmetry with the issuer… Cryptocurrencies are not subject to regulation. Markets need to be stable and functioning, credible actors monitored and cartels investigated. Commodity regulation is principle-based, market-oriented and global in nature. Goods survive to those who collect them…
“Ripple has created something that has an ecosystem for Brad, Chris, David, or anyone else to survive. The very fact that there is an independent XRP army that criticizes me is proof of this reality. The ledger is likely to retain its transactional value for decades… The merit of this litigation is that it has millions of independent participants in over 100 countries and is managed by a single corporate fiduciary. It should depend on the absurdity of applying securities regulation to things we cannot control…
“So there seems to be no need at all to construct elaborate personal attacks against former and current civil servants, or attack them because of Bitcoin’s energy use or China’s influence…
“In the absence of bespoke regulation, regulators are just trying to apply the existing rules appropriately, regardless of whether it makes sense or is fair…so what we are building together Because of the new economy, it makes sense to change the rules of the game to prosper…it has been done before. Sarcasm and bullying don’t solve anything. It takes leadership and hard work. The new law he expects to be passed in 2023… Courts are no substitute for legislative holes, as we have seen even stable decisions like Roe v Wade evaporate. If you want certainty, you need to legislate.“
On Sept. 23, Ripple Labs CEO Brad Garlinghouse spoke to CNBC technology reporter MacKenzie Sigalos about the SEC’s ongoing lawsuit against himself and his company.
“It should be remembered that 99.9% of XRP transactions have nothing to do with Ripple. So when I say “XRP is a security” I go back to what I said many years ago when they started. who is the owner? I think it is clear that there is no investment contract...
“For an investment contract that I find difficult to pass the Howie test, all three prongs must be met, and in the case of XRP, all three prongs are not guaranteed to be met. So I think judges will find that the law is very clear, the facts are very clear...
“I think the “ripple test” may be what we’re seeing in the future. I think it’s just that.”
On September 21st, Ripple’s CEO spoke with Messari’s co-founder and CEO, Ryan Selkis, at Messari’s annual conference Mainnet in New York City (September 21-23, 2022) .
First, Garlinghouse talked about Ripple’s mission and where it stands today.
“Today, I believe…we are effectively building enterprise blockchain-based solutions. We started with cross-border payments. We sell to banks. We sell to financial institutions. Billions of dollars are being transacted via RippleNet, XRP and a product called on-demand liquidity.
“I think Ripple is one of the few truly scaled crypto use cases that actually solves the problem. It’s not a science experiment. Not in testing stage. If anything, we are now trying to curb growth. Demand is actually outstripping our ability to meet that demand right now. While Q2 was clearly a tough quarter for crypto overall, it was a record quarter for Ripple.“
He then addressed the misconception that Ripple runs much of the infrastructure that powers the XRP Ledger.
“Let’s start with the facts. Today, out of 155 validators on the XRP Ledger, Ripple is running like 6 out of 155. An amendment to the XRP Ledger that Ripple opposed was passed. This is traditional open source software. we can’t control it.“
Regarding the SEC lawsuit, Ripple’s CEO said:
- The first time he went to see the SEC, he “didn’t go with a lawyer”.
- Ripple is ready to spend over $100 million to defend itself against the SEC, and he believes this is important not just for Ripple, but for the crypto industry as a whole.
- Back in 2017, Ripple was trying to “sign Customer 1” (to use XRP in production rather than test environments).
- When the SEC launched a lawsuit against Ripple in December 2021, “XRP was traded on more than 200 exchanges around the world,” and “99% of XRP trades have nothing to do with the company Ripple.” There was no.”
- The first letter Ripple received from the SEC in 2019 reportedly said the SEC wanted Ripple’s “voluntary cooperation” and, in fact, the letter said it had “made no decision on what.” There was a sentence. We see XRP as: However, the SEC claims in its lawsuit that from 2013 to 2023 Garlinghouse “should have known that XRP was a security.”
- Ripple believes it “won’t even reach the Howey test” because it “has no investment deal.” Neither Ripple nor Garlinghouse “make a deal with anyone who buys XRP.”
- By mid-November, Ripple will have to “explain fully before a judge” its motion for summary judgment, after which it could take two to nine months to reach a decision. A judge is unlikely to say a trial is necessary. Because there is no real dispute about the facts, only about how the law should be interpreted.
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