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I'm going to show you why this SEC lawsuit is probably going to very quickly and ironically determine XRP isn't a security
A precedent lawsuit that the SEC filed against Kik for precisely the same reason, specifically targeted Kik's early sales of their Kin token
continued..
A precedent lawsuit that the SEC filed against Kik for precisely the same reason, specifically targeted Kik's early sales of their Kin token
continued..
The lawsuit made no attempt to characterize Kin as a security or currency, it just focused on the nature of Kik's $100 million in Kin token sales, which the SEC decided we're close enough to security sales to pursue it.
A pittance of $5 million fine was levied against Kik.
Very important quote
"undisputed facts established that Kik’s sales of “Kin” tokens were sales of investment contracts, and therefore of securities"
https://www.sec.gov/news/press-release/2020-262
Very important quote
"undisputed facts established that Kik’s sales of “Kin” tokens were sales of investment contracts, and therefore of securities"
https://www.sec.gov/news/press-release/2020-262
Notice the context..
Kik's SALES of kin tokens were SALES of investment contracts...
It clearly distinguishes kin tokens from the selling activity. In other words, it was the SELLING that's being characterized as a security transaction, not the asset itself.
Kik's SALES of kin tokens were SALES of investment contracts...
It clearly distinguishes kin tokens from the selling activity. In other words, it was the SELLING that's being characterized as a security transaction, not the asset itself.
If this clear precedent plays out in Ripple's case, they will be levied a pittance of a fine, and XRP will clearly be demonstrated as not within the sights or purview of the SEC.
It seems unfortunate that a lawsuit was the path to accomplish this, but a no-action letter from the SEC was probably not possible because of the discovery process, but it's the next best thing for XRP because it's hard to imagine a different outcome than the Kik scenario.
Some would argue that Kik's token KIN was damaged by the lawsuit, and for obvious reasons, nobody know how it would end. But here's how it did end..
"There will be no trading restrictions on the KIN token, and the token will circulate freely on exchanges. Furthermore, the SEC has not asked Kin to register its tokens as a security." https://cryptobriefing.com/kik-survives-grueling-sec-battle/
So quite clearly, XRP won't become a security. Moreover, after the settlement, Kik was allowed to retain their assets and continue forward.
To imagine a different outcome for Ripple's case is to defy legal precedent. Ripple will be fined a symbolic amount and that's fucking it
To imagine a different outcome for Ripple's case is to defy legal precedent. Ripple will be fined a symbolic amount and that's fucking it
One other very important point is that we don't even really care about the outcome of the lawsuit. We already know it shouldn't affect XRP, and Ripple's likely going to be able to afford the lawsuit and penalty. This lawsuit is just noise.
After reviewing the official SEC complaint, they're proposing extremely harsh repercussions for CL and BG specifically. This unfortunate news will be quite potent and difficult to defuse until a settlement offer is made
Please don't take anything I've written here as a guarantee of anything. Be prepared for any outcome
