On Tuesday (10 January 2023), Fox Business Senior Correspondent Charlie Gasparino warned that if the U.S. Securities and Exchange Commission (“SEC”) wins its ongoing lawsuit against Ripple, the crypto community would see a bloodbath.
As you may remember, on 22 December 2020, the SEC announced that it had “filed an action against Ripple Labs 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.”
On 11 October 2022, at DC FinTech Week 2022, the Ripple CEO said — during a talk he gave titled “Enterprise Crypto and the Regulatory Perimeter” — that he expected the U.S. SEC’s ongoing lawsuit against his firm to come to a close in H1 2023.
The only major news network listening to the XRP community has been Fox Business, where journalists Charlie Gasparino, Eleanor Terrett, Maria Bartiromo, and Charles Payne — especially the first two — have been extensively covering the news about the lawsuit and interviewing from Ripple and the XRP community such as Brad Garlinghouse and John Deaton.
Last Wednesday (4 January 2023), Gasparino explained on Twitter that based on what he had found out the reason that the SEC chose to go after Ripple Labs and not Ethereum Foundation is that allegedly the latter only sold tokens once and then stopped. Naturally, this explanation angered the XRP community who correctly pointed out Ethereum Foundation has sold ETH on more than one occasion since the Ethereum ICO in Summer 2014.
This led Deaton to come to Garparino’s defense by saying that Gasparino has always been trying to cover both sides of this story and that Gasparino is just reporting what he has heard from his SEC sources, and then to go on to say that there is even video evidence showing Vitalik Buterin admitting that he and Ethereum Foundation sold ETH two year after the ICO, which to Deaton seems to mean that the lawsuit against Ripple “wasn’t about securities laws”.
Well, yesterday (10 January 2023), Garparino took to Twitter again to share his thoughts on this lawsuit. Based on his tweet, he believes that if Ripple loses, there will more regulations (or some other form of oversight) that will impact every part of the crypto space including crypto exchanges since he believes that SEC Chair Gary Gensler sees every cryptocurrency other than Bitcoin as a security that needs to be registered.
It is true that Bitcoin has much higher regulatory clarity in the U.S. than Ethereum since both former SEC Chair Jay Clayton and current SEC Chair Gary Gensler have on several occasions have confirmed that they consider Bitcoin to be a commodity rather than a security and therefore outside their purview. Sadly, the same cannot be said about Ethereum.
Apart from what William Hinman, a former Director of the SEC’s Division of Corporation Finance, said during a speech in June 2018, the SEC’s position is that it has never in any official form stated that Ethereum is a commodity or a security, i.e. it is possible (especially if Ripple Labs loses the on-going lawsuit started against it by the SEC in December 2020) that any day in the future the SEC could decide to declare that Ethereum is a security, which could have a huge negative impact on its price since crypto exchanges in the U.S. would then have to delist it.
Jeremy Hogan, a partner at the American law firm Hogan & Hogan, sent out the following reply to Gasparino:
“The SEC’s case was weak and ill-conceived from the start. Ripple put up the BEST defense money can buy. Ripple is literally the crypto communities’ Jet Li. If Ripple’s kung-fu is not good enough, no one’s is.“
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