SEC vs. Ripple Saga: Garlinghouse and Larsen’s Lawyers File for Dismissal

SEC vs. Ripple Saga: Garlinghouse and Larsen’s Lawyers File for Dismissal

Ripple’s CEO Brad Garlinghouse and co-founder Chris Larsen have just appealed to Judge Analisa Torres in two separate motions to dismiss the US SEC’s amended complaint against Ripple Labs and its executives.

Attorneys representing Garlinghouse stated in the letter that the suit by the SEC against Ripple was just a “regulatory overreach.” The attorneys argued that the SEC’s accusations that Garlinghouse aided and abetted the sale of XRP was flawed on several fronts.

The letter reads: “The SEC fails to recognize the economic realities of Defendants’ transactions in XRP, the XRP market, and Ripple’s business, each of which exhibits none of the traditional characteristics of an investment contract under SEC v. W.J. Howey Co.”

The Howey Test is a staple tool used by the SEC to determine whether an asset is a security or not. Based on this test, the SEC asserts that XRP had all the qualities of a security per the Howey Test.

Nonetheless, Ripple Labs and its executives have reassured that XRP is a virtual currency, as confirmed by the Justice Department and FinCEN.

Garlinghouse’s XRP Holding Sale
The filing also touched upon the recent amended complaint filed by the SEC before the pretrial hearing on February 22, which claimed that Garlinghouse went against securities laws when he sold some of his XRP holdings through Ripple.

Brad Garlinghouse. Source: Google

The embattled CEO has allegedly sold more than 60% of his XRP holdings worth about $160 million, a move that has gotten heavily criticized by the cryptocurrency community.

However, Garlinghouse’s attorneys have asserted that the SEC’s case against their client is baseless since there was no proof to show that those transactions occurred with the US. They noted that “the truth is that the vast majority of Mr. Garlinghouse’s XRP sales were made on foreign exchanges, and those transactions do not and cannot violate the federal securities laws.”

Meanwhile, the attorneys representing Chris Larsen noted in their letter that the SEC has failed “to state a claim against Mr. Larsen.” That said, they are urging that the lawsuit against their client get dismissed.

Garlinghouse recently stated that the SEC’s case was an “assault on crypto at large” and that Ripple “will not let SEC bully the entire [crypto] industry.”

 

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MoneyGram Now Facing Class-Action Suit Despite Cutting Ties With Ripple

MoneyGram Now Facing Class-Action Suit Despite Cutting Ties With Ripple

MoneyGram has gotten slammed with a class-action lawsuit for allegedly misleading investors with Ripple (XRP) sales. Rosen Law Firm announced that it is filing a class-action lawsuit against the payments solution company on behalf of investors who bought MoneyGram securities in 2019.

The law firm noted that investors who bought MoneyGram shares between June 17, 2019, and February 22, 2021, are entitled to compensation from the company, considering that MoneyGram partnered with Ripple Labs. Ripple is currently battling a suit with the SEC for allegedly offering unregistered securities through the sale of XRP.

The Rosen Law Firm complaint alleges that: “Defendants made false and/or misleading statements and/or failed to disclose that XRP, the cryptocurrency that MoneyGram was utilizing as a part of its Ripple partnership, was viewed as an unregistered and therefore unlawful security by the SEC.”

Meanwhile, just a few weeks ago, MoneyGram announced that it was suspending its ties with Ripple and momentarily halting the use of XRP on its network. The payment behemoth received payment from Ripple to leverage XRP for remittance services. XRP got used to convert a variety of foreign currencies in a secure manner and at a low cost via its blockchain.

Although MoneyGram was quick to cut ties with Ripple after the SEC lawsuit, it did not stop investors from rallying behind a class action suit, claiming that the company knowingly misled them.

XRPUSD – Hourly Chart

Key XRP Levels to Watch — March 3

XRP has been trading within a range between $0.4500 and $0.4000 for the past week, as the cryptocurrency market got dominated by bears. That said, it appears that bulls are starting to take control, once again, with XRP challenging the $0.4500 resistance.

A break above the $0.4500 could take the cryptocurrency to $0.5000 and higher in the coming hours. However, XRP currently lacks any trading volume of volatility, thereby making a sharp move upwards troublesome. This means that we could see the seventh-largest cryptocurrency consolidate around the $0.4500 area for a bit.

Nonetheless, a fall below the $0.3838 seems very unlikely at the moment.

Meanwhile, our key resistance levels are at $0.5400, $0.6000, and $0.6374. While our key support levels are at $0.4524, $0.3838, and $0.3500.

Total Market Capitalization: $1.57 trillion

XRP Market Capitalization: $20.3 billion

XRP Dominance: 1.3%

 

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SEC Files Amended Complaint Against Ripple, as Pretrial Begins

SEC Files Amended Complaint Against Ripple, as Pretrial Begins

The United States Securities and Exchange Commission (SEC) has filed an amended complaint towards Ripple, alleging that it willfully misled investors with XRP.

The amended complaint got filed just a few days before the pretrial hearing between the SEC and Ripple, which began on February 22. While it originally accused Ripple Labs and its top executives of violating securities laws with a $1.3 billion XRP sale, the regulatory body is now alleging that Garlinghouse and Larsen intentionally manipulated XRP’s market price by increasing and lowering their XRP sales to suit market conditions.

The amended SEC complaint stated that “from at least 2013 through the present, Defendants sold over 14.6 billion units of a digital asset security called ‘XRP,’ in return for cash or other consideration worth over $1.38 billion US Dollars (‘USD’), to fund Ripple’s operations and enrich Larsen and Garlinghouse.”

However, the General Counsel to Ripple, Stuart Alderoty, noted that the new complaint brought forward no arguments and that there was only one legal question to be settled; whether or not XRP is considered a security under US investment laws. According to a recent tweet on the matter, Alderoty tweeted: “as many of you have seen, the SEC filed an amended complaint. The only legal claim remains: did certain distributions of XRP constitute an investment contract? Disappointing the SEC needed to try to ‘fix’ their complaint after waiting years to bring it in the first place…”

XRPUSD – 4-Hour Chart

Key XRP Levels to Watch — February 24

Following yesterday’s crypto market bloodbath, XRP appears to be regaining its bullish momentum and is up by 3.6% at press time. That said, the seventh-largest cryptocurrency has to break back above the $0.5400 resistance to establish a renewed bullish dominance.

That said, we could see the price stall (consolidate) below the $0.5400 resistance in the coming hours. On the flip side, only a sustained drop below the $0.4524 support can negate the current bullish momentum.

Meanwhile, our key resistance levels are at $0.5400, $0.6000, and $0.6374. While our key support levels are at $0.4524, $0.3838, and $0.3500.

Total Market Capitalization: $1.54 trillion

XRP Market Capitalization: $22 billion

XRP Dominance: 1.4%

 

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Moneygram Severs Ties With Ripple Amid SEC Lawsuit Saga

Moneygram Severs Ties With Ripple Amid SEC Lawsuit Saga

Moneygram International announced yesterday that it has halted operations on Ripple’s platform. The news came with the company’s Q4 and 2020 earnings report.

In its outlook for the first quarter of 2021, Moneygram noted that it “is not planning for any benefit from Ripple market development fees in the first quarter,” adding that “due to the uncertainty concerning their ongoing litigation with the SEC, the company has suspended trading on Ripple’s platform.”

Before now, the payment solution company had a commercial agreement with Ripple, enacted in June 2019, to “use Ripple’s foreign exchange (FX) blockchain trading platform (ODL) for the purchase or sale of four currencies.”

In its earnings report on Monday, Moneygram explained that “in the first quarter of 2020, the company realized a net expense benefit of $12.1 million from Ripple market development fees.” The company also noted that in Q4 of 2020, it generated “$8.5 million net benefits from Ripple market development fees of $9.2 million, partially offset by related transaction and trading expenses of $0.7 million.”

Furthermore, its financial statement for the years 2020 and 2019 include Ripple market development fees of $50.2 million and $11.3 million, respectively. These numbers were counteracted by related transaction and trading expenses of $11.9 million and $0.4 million, respectively.

SEC’s Lawsuit Against Ripple
Moneygram cited the recent SEC lawsuit against Ripple Labs Inc. as the reason for its tie-severing move.

The SEC lawsuit, which got filed in December 2020, charges Ripple’s CEO and co-founder with conducting a $1.3 billion unregistered securities offering of XRP.

The lawsuit alleges that “much of the onboarding onto ODL was not organic or market-driven. Rather, it got subsidized by Ripple.” The SEC added that “though Ripple touts ODL as a cheaper alternative to traditional payment rails, at least one money transmitter … found it to be much more expensive and therefore not a product it wished to use without significant compensation from Ripple.”

 

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Have you invested in an extremely rare opportunity of a lifetime?

Have you invested in an extremely rare opportunity of a lifetime?

The Next “Buzz Word” Altcoins
Last month, the Bloomberg Galaxy Crypto Index was at 1414.37, following a low of 217.82 in early March. BTC had made a new high yesterday at $51,630.86. Today (February 17) and the index was at 2,295.61. That’s a huge gain for one month.

Let me put this into perspective. In late 2017, I said that cryptoassets were the biggest institution revolution since the Industrial Revolution and that they represented the investment of a lifetime. Institutions, however, were not ready or capable of participating in that revolution so they “pooh-poohed” it. The SEC decided that most altcoins were securities which precipitated a huge bear market. By the end of 2018, cryptos had undergone an 85% decline and BTC hit a low price of $3,236.76 on Dec 15, 2018. But then look what happened.
BTC was up 92.71% in 2019
It was up 305.94% in 2020
And it’s up 75.42% in less than 50 days of 2021….

What did I say in 2018? There was actually a period from October through November last year when I made over $3 million in 7 weeks. Cryptos are the investment of a lifetime.

While BTC could go up another 10 fold in the long run, I doubt that it will go much over $100,000 this year…. But the opportunity of a lifetime is not over because now the altcoins are starting to move. Here are a few examples, and this is just the movement in 2021.

BNB 289%
ETH 144%
LINK 178%
SNX 215%
AAVE 397%
CND 145%

And remember those gains are just from the 48 days of 2021….

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Update on Cryptoassets
I think that there are a number of altcoins that could go up 10 times or more during the rest of 2021. Now we might have a decline of 40% or more during the year, but it probably will be short-lived with a very quick recovery…
BTC was up 92.7% in 2019, 305.94% in 2020, and in the first six weeks of 2021, it’s up 74.22%. Let’s contrast that with the other hedge against the USD and disaster, gold. Gold was up 20.94% in 2019, up 18.32% in 2020, and it’s down 5.1% so far in 2021. The path of safety is now BTC.

Gold has about 10 times more market cap than cryptos right now (even though cryptos are now over a trillion for the 1st time). If all of the money in gold went into BTC, BTC’s price would be about $370,000…

People talk about BTC being volatile and risky. But where can you find something that has made over 1,000% in 3 of the last 11 years, over 100% in 8 of them, and had only two losing years? There is only one other place than BTC with anywhere near equal performance – other cryptoassets.
If you had bought BTC at the beginning of 2012 (well, not at the very beginning), you would have turned $1,000 into more than $7.1 million (up $4.5M last month)…

Remember these are 30-day percent gains. This is probably the easiest market possible to make a lot of money. You could, however, just as easily enter a position and immediately have a 25% drawdown – which could cause you to exit and then miss out on some nice gains. If you don’t have strong beliefs about cryptos like I do, crypto volatility will test you…

This newsletter makes no recommendations about cryptos but is a free service… I personally own positions in most of the cryptos mentioned in this newsletter.

Author: Van K. Tharp, PhD

Note: This article was culled and abridged from a monthly cryptos update by Dr. Van Tharp. The full article can be accessed here.

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XRP/USD Price Analysis — February 17

XRP/USD Price Analysis — February 17

The ongoing SEC vs. Ripple debacle has sown a seed of mistrust in the hearts of many investors against holding XRP.

Ripple’s former CTO, and co-founder, Jed McCaleb, is leading the charge and has been offloading his Ripple (XRP) holding at a steady rate.

McCaleb, alongside Chris Larsen and Brad Garlinghouse, co-created and founded Ripple Labs in 2012. After leaving Ripple, McCaleb developed the now-defunct Bitcoin exchange Mt. Gox and the Stellar Development Foundation, which hosts the budding cryptocurrency Lumen (XLM).

The programmer left XRP with about 9 billion XRP tokens, of which more than 6 billion have already gotten sold. Although the former Ripple executive is free to do whatever he likes with his XRP holding, a strict agreement on how much XRP he could sell a day was penned-down, to safeguard XRP’s price in the market from the effects of a significant dump.

Recent data shows that McCaleb has been on an XRP selling spree for a while now. Since the start of February, McCaleb has sold 95 million XRP, worth about $56 million. On Valentine’s day, the XLM co-founder dumped a whopping 38 million XRP worth about $22 million. Market analyst Leonidas Hadjiloizou noted that McCaleb’s XRP sales are not likely to slow down anytime soon.

The analyst said that “Jed will be selling 38,345,406.53 XRP per day this week. This amounts to roughly 268M XRP or $166M at current prices in 1 week. At this rate, his 2.896B XRP would run out by May. At half that rate (19M per day), he would run out by mid-July. At 10M per day by the end of the year.”

XRPUSD – 4-Hour Chart

Key XRP Levels to Watch — February 17

The XRP is currently on a bearish roll, following the recent development surrounding the SEC saga. The cryptocurrency got heavily rejected at the $0.6374 resistance, which triggered a correction to the upward-facing trendline. However, XRP has broken through the trendline and appears to be going for the $0.4524 support.

That said, the sixth-largest cryptocurrency could find decent support at the $0.5000 psychological support, which could help it stage a rebound to the $0.6000 area. The failure of bulls to defend the $0.5000 line could precipitate further declines for Ripple, over the coming hours.

Meanwhile, our key resistance levels are at $0.6374, $0.6660, and $0.7800. While our key support levels are at $0.5000, $0.4524, and $0.3838.

Total Market Capitalization: $1.48 trillion

XRP Market Capitalization: $45.4 billion

XRP Dominance: 3.06%

 

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SEC vs. Ripple: Settlement Now Unlikely as Pretrial Draws Nigh

SEC vs. Ripple: Settlement Now Unlikely as Pretrial Draws Nigh

The US Securities and Exchange Commission (SEC) and Ripple, the host company of the sixth-largest cryptocurrency, have both asserted that there will be no settlement on the current lawsuit against Ripple before the official trial date, as many cryptocurrency enthusiasts anticipated.

The assertion was confirmed through a letter dated February 15, 2021, and was addressed to Judge Analisa Torres. In the letter, both the SEC and Ripple noted that they “do not believe there is a prospect for settlement at this time” since the last time they discussed the issue.

The parties also noted that all discussions were made under the previous administration with several SEC executives who are no longer with the commission, considering the change-of-power that occurred in the SEC late last year.

Meanwhile, some disagreements about the discovery of the trial arose, as both parties argued about the evidence, witnesses, and information to be presented in court.

The SEC noted that it was working towards taking five confirmations beyond the ten allowed over allegations, adding that it could request the court to force Ripple to provide some documents and relevant deposition testimony to support its argument.

That said, the cryptocurrency-related company has declined to accede to this request, noting that the documents are protected by attorney-client privilege, adding that the SEC’s demand is “improper and lacks legal foundation.”

The SEC vs. Ripple
The SEC and Ripple issue began in the middle of December 2020, after the regulatory body filed a lawsuit against Ripple for carrying out unauthorized securities sales per the federal securities laws.

The commission claimed that the company’s CEO and Chairman, Brad Garlinghouse and Chris Larsen, sold more than $1 billion in unregistered XRP to investors.

The first pretrial conference for the case is scheduled to hold on February 22. The letter asserted that both parties have agreed to set August 16, 2021, as the deadline for the discovery phase, which involves the assembling of all evidence and argument.

 

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