Coin Bureau on Two Major Pieces of Good News for XRP

Earlier this week, the pseudonymous host of popular crypto market commentary show Coin Bureau shared his latest thoughts on XRP.

According to a report by The Daily Hodl published on July 21, here is what the Coin Bureau had to say about XRP in YouTube video released on July 18:

ā€œA couple of other stories also caught my eye, one relevant to XRP holders. Apparently, Jed McCaleb has finally finished selling all his XRP.Ā 

ā€œFor those of you unfamiliar, Jed McCaleb was one of the original founders of Ripple. He left a few years ago to co-found Stellar, which is obviously a rival platform to Ripple. A big bone of contention since then has been Jedā€™s allocation of XRP. He was allocated around 9 billion coins, which is over 18.5% of XRPā€™s total supply and heā€™s basically been selling it off.Ā 

ā€œHeā€™s been kind of under an agreement with Ripple not to dump it all at one point, but he has basically been selling it off over the last few years, and apparently, he has finally finished doing that. No XRP has pumped along with the rest of the market, not massively because we are still in a bear market, like it or not, but this is certainly good news for XRP in the long term...

ā€œAlso, of course, coupled with the good news that XRP had last week when it scored a big victory in its case against the SEC. That case is still ongoing, itā€™s not going to be resolved anytime soon, but this is two really good bits of good news for both Ripple and XRP holders.ā€œ

https://youtube.com/watch?v=_8oXLSyVYqo%3Ffeature%3Doembed

With regard to the second piece of news he mentioned, as you may remember, on 22 December 2020, the U.S. Securities and Exchange Commission (SEC)Ā announcedĀ that it had ā€œfiled an action against Ripple LabsĀ Inc. and two of its executives, who are also significant security holders, alleging that they raised over $1.3 billion through an unregistered, ongoing digital asset securities offering.ā€Ā Essentially, the SEC is arguing that XRP is a security under U.S. federal securities laws.

On July 12,Ā Sarah Netburn,Ā a U.S. MagistrateĀ JudgeĀ for theĀ U.S. District Court for the Southern District of New York,Ā deniedĀ an important motion by the SEC in their lawsuit against Ripple.

In its letter motion, the SEC argued that ā€œinternal documentsā€ related to June 2018 speech by William Hinman are protected by ā€œattorney ā€“ client privilegeā€.

On 14 June 2018, William Hinman, then director of the Division of Corporation Finance at the SEC, made aĀ speechĀ at Yahoo Financeā€™sĀ ā€œAll Markets Summit: Cryptoā€Ā one-day event in San Francisco, California. The speech was about how the SEC plans to use theĀ ā€œHowey Testā€Ā to determineĀ whether a digital asset should be considered a security or not. The only two cryptocurrencies Hinman mentioned by name were Bitcoin (BTC) and Ether (ETH), neither of which he said should be considered as securities:

ā€œAnd so, when I look at Bitcoin today, I do not see a central third party whose efforts are a key determining factor in the enterprise. The network on which Bitcoin functions is operational and appears to have been decentralized for some time, perhaps from inception. Applying the disclosure regime of the federal securities laws to the offer and resale of Bitcoin would seem to add little value.[9]

ā€œAnd putting aside the fundraising that accompanied the creation of Ether, based on my understanding of the present state of Ether, the Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions. And, as with Bitcoin, applying the disclosure regime of the federal securities laws to current transactions in Ether would seem to add little value.ā€œ

This is what Magistrate JudgeĀ Hon. SarahĀ Netburn said about the attorney-client relationship in her ruling:

ā€œDefendants argue that Hinman is not a ā€˜clientā€™ of the SECā€™s lawyers for purposes of advice related to an outside activity such as the Speech. The SEC retorts that the Speech had to have been developed as part of Hinmanā€™s official duties because the SEC staff who provided edits and feedback to the Speech were prohibited from using agency time and resources to provide input on a ā€˜purely personal errand.ā€™ ā€¦

ā€œAt oral argument, the SEC emphasized that the information Hinman received from SEC staff while drafting and editing the Speech would not have been available to him as a private citizen; it was only in the context of his employment that he was able to solicit the edits and feedback he did.

ā€œThis question is made unnecessarily complicated by the SECā€™ s litigation tactics . The SEC has distanced itself from the Speech to avoid discovery and sought to preclude Hinmanā€™s deposition on the grounds that whatever he said in the Speech, it had nothing to do with the SECā€™s position.

ā€œThe hypocrisy in arguing to the Court, on the one hand, that the Speech is not relevant to the marketā€™s understanding of how or whether the SEC will regulate cryptocurrency, and on the other hand, that Hinman sought and obtained legal advice from SEC counsel in drafting his Speech, suggests that the SEC is adopting its litigation positions to further its desired goal, and not out of a faithful allegiance to the law.

ā€œThe Court, however, need not resolve whether Hinman was a ā€˜clientā€™ of the SEC lawyers because the evidence establishes that the predominant purpose of the communications was not to provide legal advice.ā€œ

Image Credit

Featured ImageĀ by ā€œvjkombajnā€ viaĀ Pixabay.com

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