Finally an objective analysis (not a Crypto Twitter hot take) on SEC vs. Ripple from Joseph A. Hall, partner at Davis Polk.

Key Takeaways:

1. Loosing against Ripple could "epically damage" the SEC's regulatory project w/r/t digital assets.

2. The SEC has yet to formally

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confirm that ANY digital asset — including Bitcoin and Ethereum — is not a security.

3. With the complaint filed against Ripple, the regulatory status of most crypto remains cloudy.

4. It's "not obvious" that the SEC's approach to regulating crypto should be grounded in

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metaphors about oranges and principles articulated in a 75 year-old case which "—take it from one who knows— is nearly impossible to apply with consistency and predictability across the digital asset class"

5. Securities laws are not made for digital assets.

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The regulatory obligations governing transactions in securities make it impractical to use digital assets in ordinary commercial peer-to-peer transactions. Digital assets NEED to move FREELY over a blockchain to enable the exchange of value and information.

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Shoehorning digital asset transactions into the securities regulatory apparatus would increase their cost and complexity to the point of being useless, or at the very least, uncompetitive with existing alternatives.

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6. Some aspects of securities laws, like incentives for clear disclosure, perhaps ought apply to a sale of crypto, but other parts like channeling all secondary trading through regulated intermediaries, cannot apply to many digital assets without defeating their utility.

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7. The SEC mission could be better achieved through notice-and-comment rule-making, a tool that Congress has already given it to develop a textured model for the regulation of investment-contract digital assets —which it cannot do through the regulate-by-enforcement method.

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8. Former CFTC chair, Gensler, is known for deploying robust rule-making agendas, as opposed to Jay Clayton's enforcement-first approach. He is also well versed in crypto thanks to his work with the MIT Media Lab's Digital Currency Initiative.

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By far, the most interesting takeaway here (one that I personally never thought about), is that, through responsible rulemaking, it is possible for the SEC to deem cryptocurrencies as investment contracts without forcing them to be funnelled through regulated intermediaries

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but instead, only requiring them to disclose certain information to reduce information asymmetries.

Such an approach would effectively protect investors whilst not killing digital assets interchangeability. Although it could have certain tax implications.

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In a single paper, Joseph A. Hall has dropped more valuable input than that of all the so-called crypto lawyers in thousands of tweets.

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