In late 2020, Ripple was taken to court by the SEC. Now, two and a half years later, the first verdict has been delivered. Who walked away with the win? That depends on who you ask. You can read about this, and more, in this Weekly!
Last week, the market was completely dominated by the case between Ripple and regulator SEC. We write more about its outcome in the news summary. That the market is interpreting it as favourable to Ripple for the time being can be seen in Ripple's share price.
To show that, we take out the chart we used earlier to show the differences between bitcoin, ether and the major altcoins mentioned in the lawsuits against Coinbase and Binance. To this selection, we have added ripple.
The chart nicely shows how the BlackRock ETF filing mainly gave bitcoin wind at its back, and how the ruling in the Ripple case mainly boosted altcoins. Ripple makes the biggest jump, polygon, and cardano are in between and Binance coin barely benefits.
First, it remains to be seen whether this rise will continue. At this stage in the market cycle, the weakness of altcoins against bitcoin belongs in principle. Individual assets may well outperform, but an alt season is unlikely.
The lawsuit filed by the SEC against Ripple began on 22 December 2020. The accusation? The company allegedly raised over $1.3 billion through the illegal sale of securities.
The sale of XRP tokens went through several routes. Some were sold to institutional investors, some were offered through exchanges, and some were distributed to employees and project partners. It was up to the court to rule on these three distribution methods. Were they legal?
No, the judge said of the sales to institutional investors. In each case, it was clear that the buyer had a profit expectation and that Ripple was paid for it. Offerings of such investment contracts require a green light from the SEC and so were illegal unregistered securities offerings. Profit for the regulator.
XRP, as a digital token, is not in and of itself a "contract, transaction[.] or scheme" that embodies the Howey requirements of an investment contract.
In other words, the token is not necessarily a security. Its classification depends entirely on the circumstances, such as what the token represents and how the token is presented. In selling it to institutional investors, the problem was not the token, but the packaging in which it was presented.
Amdax is involved in the new season of Satoshi Radio as a sponsor. This Dutch-language podcast has been an important source of information for serious crypto investors for years. The latest episode focuses on bitcoin's market cycle. What it is, how to recognise it, where we are now, and what is the next phase? You can hear it on YouTube or in a podcast player of your choice!
Over the past few months, we have expanded our range of business services. Today, we would like to explain our NFT solution for businesses.
Non Fungible Tokens (NFTs) have become an important niche within the world of digital assets in recent years. Organisations, brands, artists and performers use NFTs as an innovative way to connect with customers and fans. Amdax facilitates the issuance, storage and compliance of issuing NFTs for organisations.