Buterin Blasts Ripple’s Defence Against Pending SEC Lawsuit

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It finally happened. After years of uncertainty on the matter, the SEC is taking decisive action against Ripple. The point in question is whether or not Ripple’s native XRP token is a security.

Late yesterday, Brad Garlinghouse, CEO of Ripple, said the SEC had made a decision and it was planning to take action.

Under US securities law, companies must register with the SEC before selling any securities. A step that Ripple didn’t follow.

Garlinghouse tweeted about the situation, calling it an attack on the entire crypto industry, not just Ripple. He went on to say that the action was incompatible with the position of other G20 countries. And as mentioned earlier, his position is that this is detrimental to the US

The SEC – not in line with other G20 countries and the rest of the US government – shouldn’t be able to figure out what innovation looks like (especially if its decision directly benefits China). Make no mistake, we are ready to fight and win – this fight is just beginning.

Today the SEC decided to attack crypto. Chairman Jay Clayton picks the winners in his final act and seeks to limit US innovation in the crypto industry to BTC and ETH. (1/3) https://t.co/r9bgT9Pcuu

– Brad Garlinghouse (@bgarlinghouse) December 22, 2020

Garlinghouse does not agree with the SEC’s interpretation of the Howey Test

In 2018, former SEC chairman Jay Clayton stated that Bitcoin and Ethereum are not securities.

The SEC classifies a security as an investment in a joint venture where the investor expects gains primarily from the efforts of others.

The efforts of others mean a significant central third party whose efforts are a critical factor in the company.

Both Bitcoin and Ethereum fit into the list of decentralized platforms, according to Clayton. As such, they do not rely on significant central parties.

“When I look at Bitcoin today, I don’t see a central third party whose efforts are a crucial factor in the company. The network that Bitcoin works on is operational and appears to have been decentralized for some time, possibly from the start.

Other than the fundraiser that came with the creation of Ether, current offers and sales of Ether are not securities transactions from my understanding of the current state of Ether, the Ethereum network and its decentralized structure. “

In the past, Garlinghouse pointed out that Chinese mining companies control the majority of hashing power for both Bitcoin and Ethereum. Since these are key central third parties, the SEC’s ruling is unfair.

In preparation for the SEC’s acquisition, Ripple has prepared a summary statement on which they will base their defense.

Ethereum co-founder Vitalik Buterin then blew up the document that said Ripple was clinging to straws. Buterin firmly believes that Ripple’s arguments about “Chinese control” carry no weight when it comes to Ripple’s relationship with XRP.

It looks like the Ripple / XRP team is sinking to new levels of strangeness. They claim that their shit shouldn’t be labeled security for * public order * reasons, namely because Bitcoin and Ethereum are “controlled by China”. 😂😂https: //t.co/ts02JqrTrB pic.twitter.com/mKwEzGIetk

– vitalik.eth (@VitalikButerin) December 22, 2020

Buterin’s response to the document has been criticized by many, including Changpeng Zhao, Binance CEO. Zhao reiterated what Garlinghouse said by saying that this is holding back the entire crypto industry.

Let’s be decentralized, but not divided. Let’s help each other grow the industry. #BTC, #ETH, #XRP, #BNB https://t.co/2jQZ48a12x

– CZ Binance (@cz_binance) December 22, 2020

Ripple’s XRP strikes

XRP broke on the news, bouncing back from the $ 0.45 support level that is currently at $ 0.46. After breaking below the key support at $ 0.53, expectations of another downtrend are rising.

The SEC case will be a long and drawn-out affair. Then what for the price of XRP?

As Nugget’s News’s Alex Saunders pointed out, Ripple relies on partnerships with companies that are compliant. He said:

I feel for $ XRP Investors who are hurt right now. I have stated many times why things would never end well@ Ripple. Hopefully this has helped some of you dodge that bullet. No compliant company will touch #XRP with it over the head. ”

Garlinghouse spoke of fighting and winning. But how realistic are Ripple’s chances of staying ahead?

Source: XRPUSDT on TradingView.com