On Friday (9 August 2022), crypto investor and analyst Miles Deutscher explained why he wants Ripple to win even though he is not a “huge fan” of digital asset $XRP.
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.
According to a report by The Daily Hodl, on 23 September 2022, during an interview on CNBC’s “Crypto World”, Garlinghouse said:
“You have to remember that 99.9% of XRP trading has nothing to do with Ripple the company. So when you talk about, okay, ‘XRP’s a security,’ I go back to something I said years ago when they started: ‘A security of what company? Who is the owner?’ I think it’s very clear there is no investment contract...
“If you get past the investment contract, which I think is hard, across the Howey Test, you have to meet all three prongs, and in the case of the XRP case, you can’t meet all three prongs for sure. And so we think that the judge will see that the law is very clear, we think the facts are very clear, we think this is just a gross overreach of the SEC trying to wrest control of that uncertainty that has existed...
“I think the ‘Ripple Test’ may be what we look at in the future. There are a lot of facts and circumstances that can be unique, but for Ripple, and what the SEC is trying to do, I do think it’s just the SEC trying to overreach the statute.”
On 21 September 2022, the Ripple CEO talked to Ryan Selkis, Co-Founder and CEO at Messari, at Messari’s annual conference Mainnet (September 21-23, 2022) — in New York City.
First, Garlinghouse talked about Ripple’s mission and where it stands today:
“Today, I believe… we are effectively building enterprise blockchain base solutions. We started with cross-border payments. We sell to banks. We sell to financial institutions. We have billions of dollars of transactions going throughRippleNet, through XRP with the product we call On-Demand Liquidity.
“I think Ripple is one of the few truly scaled crypto use cases that actually is solving a problem. It’s not a science experiment. It’s not in a testing phase. If anything, we’re trying to throttle growth right now. The demand is outstripping really our ability to serve that demand right now. In Q2, which was obviously a tough quarter for crypto at large, was a record quarter for Ripple.“
Next, he addressed the misconception that Ripple runs a lot of the infrastructure that powers the XRP Ledger:
“Let’s try to start with facts. So today, of the 155 validators on the XRP Ledger, Ripple runs like six out of 155 or something… There’s been amendments passed on XRP Ledger that Ripple the company opposed. It’s traditional open source software. We can’t control it.“
As for the SEC’s lawsuit, the Ripple CEO had this to say:
- Ripple believes that there is “no investment contract” and so “you don’t even get to the Howey test.” Neither Ripple or Garlinghouse “enter into a a contract with anyone who bought XRP.”
- By mid November, Ripple should have the motion for summary judgement “fully briefed in front of the judge”, and then it could take between two and nine months for a decision to be made. It is unlikely that the judge will say a trial is needed since there is no real dispute on the facts, only on how the law should be interpreted.
Last Friday (2 December 2022), Ripple’s General Counsel announced that Ripple had “filed its Redacted Reply to the SEC’s Opposition to Ripple’s Motion for Summary Judgment.”
On 4 December 2022, entrepreneur David Gokhshtein, who is Founder and Chairman of crypto-focused media outlet Gokhshtein Media, predicted that Ripple would win this lawsuit:
Earlier today, crypto analyst Miles Deutscher told his over 258K Twitter followers:
“I’m not a huge $XRP fan, but for the sake of our industry I really hope they win. If they don’t, there will likely be massive ramifications. Anyone hoping they lose is against crypto.“
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