Crypto and Stock - 仮想通貨と株

Social network X user Joe Shaw and cryptocurrency lawyer Bill Morgan discussed the legal status of the XRP token issued by Ripple.

Shaw expressed uncertainty about the legal clarity surrounding XRP, so Morgan explained the intricacies of the current situation.

I think, Joe, it definitely exists. Only some bitcoin maximalists can't read and understand the court decision or are too biased or dumb to realize the judge's clear words that XRP itself is not a security," Morgan scathingly replied.

The lawyer also called attention to the Securities and Exchange Commission's (SEC) letter to the court. The document explicitly stated that the SEC did not seek review of the finding that XRP is not a security.

David Schwartz, Ripple's CTO, has recently spoken out on the topic as well, as he delved into the complexities of U.S. securities laws. He recalled the Howey case, a landmark Supreme Court decision that laid out the criteria for an investment contract.

Schwartz added that "the Howey test is flexible and cannot be applied automatically," leading to various court cases. Meanwhile, the crux of the issue is the expectation that profits will be realized "solely" through the efforts of other parties

Morgan agreed agreed that the CTO's explanation excelled at explaining a complex topic

Is not an investment advisory board ❗️

Brian Armstrong, director of the US cryptocurrency exchange Coinbase, said that the US authorities had ignored the company's questions about cryptocurrencies.

He said that Coinbase representatives have met with Securities and Exchange Commission (SEC) officials 30 times over the past 18 months, but have never been able to get the officials to answer the question of what digital assets they categorize as securities.

The regulator has only made its position clear on bitcoin, saying that the coin is not a security.

Brian Armstrong

Instead of answers to their questions, in March 2023, Coinbase employees received a notice from the SEC about the agency's plans to penalize the exchange. And in June, the commission filed a lawsuit accusing the trading platform of illegally trading securities, which officials believe include Solana (SOL), Polygon (MATIC), Cardano (ADA) and several other coins.

Coinbase management did not admit guilt in the incriminated crime and noted that the cryptocurrencies presented on the site are not included in the list of securities.

According to him, the UK compares favorably with the US in the approach to the supervision of trading in digital assets and the interaction of cryptocompanies with the government. This is most likely because the country's Prime Minister Rishi Sunak supports the use of digital assets.

We have been working very productively with the Financial Services Authority in the UK. It is good to have one federal agency overseeing the sale of goods and securities.

In this case, there are no problems like in the US, where the Commodity Futures Trading Commission and the Securities and Exchange Commission fight each other for the right to regulate the circulation of assets," Brian said.

What happened ?

Binance has settled the claims of the US Department of Justice, agreeing to pay a $4.3 billion fine. In addition, Binance founder and head Changpeng Zhao pleaded guilty to violating securities laws, which, according to DOJ officials, facilitated money laundering on the exchange. The businessman paid a bail of 175 million dollars, the announcement of the verdict is scheduled for February 23 next year. Along with this Zhao left the post of CEO of the global platform.

Material CoinDesk

What else is known ?

4.3 billion dollars will go to pay the fines imposed by several federal agencies. Attorney General Merrick Garland responded that this is one of the largest fines for an entity in a criminal case in US history.
As part of the agreement, Binance will exit the U.S. market entirely and allow a group of third-party U.S. monitors to oversee its operations for the next five years. Because Zhao pleaded guilty under the agreement, he waived his right to appeal any sentence within 18 months.

In addition to the DOJ, the exchange settled claims by two of its divisions - the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) - as well as the Commodity Futures Trading Commission (CFTC).
Zhao himself is allowed to reside in the UAE pending sentencing, but must return to the States two weeks before the hearing.
Zhao will be replaced as CEO by Richard Tan, formerly in charge of the exchange's regional markets outside the US.
Amid the news, users withdrew $1.01 billion from Binance overnight, and the exchange token BNB fell 10% to $234.4.
Matrixport analyst Markus Thielen believes that this outcome will allow Binance to maintain its leading position in the market for the next two to three years. In addition, other exchanges, following Binance, will strengthen their compliance controls, which could accelerate the approval of bitcoin-based spot exchange-traded funds (ETFs) in the United States. The co-founder of F2Pool under the nickname @bitfish1 has a similar opinion on ETFs.

The top manager of the US crypto exchange Coinbase
Conor Grogan analyzed data on Binance's reserves and savings and concluded that it would be able to pay the fine without having to sell any cryptocurrencies. Coinbase CEO Brian Armstrong believes that the case against Binance will be a catalyst for creating a clear regulatory framework for cryptocurrency companies to operate in the United States.