SEC Gains Support: Advisor to El Salvador President Agrees with SEC Chair
Gary Gensler, the Chair of the U.S. Securities and Exchange Commission (SEC), has faced considerable criticism for his regulatory actions in the United States, particularly in relation to digital assets. His classification of all digital assets, except for Bitcoin, as securities have sparked controversy within the crypto space. This has also led to the SEC getting involved in numerous lawsuits.
However, there has been a recent development where Gensler seems to have gained a supporter who agrees with his stance on digital assets. An advisor on Bitcoin to the President of El Salvador has expressed agreement with Gensler’s declaration that XRP, a prominent cryptocurrency, should be classified as a security.
The Rationale Behind Keiser’s Statements
Max Keiser, an advisor on Bitcoin to the government of El Salvador, agrees with SEC Chairman Gary Gensler’s categorization of most cryptocurrencies, including XRP, as securities. Keiser is a staunch supporter of Bitcoin and boasts that El Salvador has already implemented laws acknowledging Bitcoin as a non-security. Additionally, he asserts that all cryptocurrencies, except for Bitcoin, should be classified as securities, including well-known ones like XRP and Ether (ETH).
In addition, Keiser extended an invitation to Gary Gensler, the chairman of the United States Securities and Exchange Commission, urging him to visit El Salvador and witness firsthand how it has emerged as the world’s foremost Bitcoin nation.
Gary Gensler: Crypto Market Is Based On A “False Narrative” Of Decentralization.
Keiser expressed his views in response to Gensler’s recent statement on cryptocurrency regulations. During a recent question-and-answer session involving the SEC, Gary Gensler voiced his concerns regarding crypto companies failing to adhere to existing securities regulations. He further added that the crypto market is based on a “false narrative” of decentralization.
Gensler restates that cryptocurrencies, except Bitcoin, are considered securities. However, he ignores the demands of crypto stakeholders who want clear rules from the commission. Gensler believes existing securities laws are enough for the crypto industry and doesn’t see the need for new guidelines.
XRP Community Reacts to Max Keiser
This controversial statement by Max Keiser has gained a lot of attention in the crypto industry, especially amidst the XRP community which has an ongoing lawsuit with the same point of contention. According to the CEO of Chainstone Labs and others, criticisms have been raised regarding the excessively restrictive nature of the law.
Mr. Huber, a well-known crypto influencer, humorously responded to the situation with a video and questioned whether Keiser had bribed Gensler.
Several others have also disagreed with Keiser and have tried to explain the technicalities of why XRP is not a security.
Ripple Vs SEC News: Pro-XRP Lawyer John Deaton Explains The Scenario If Ripple Agrees to Settle With SEC
Attorney John Deaton took to his Twitter handle on Tuesday and addressed the question of why and how Ripple would settle if they win their ongoing legal battle. Deaton has been a vocal advocate for XRP and has argued that the SEC’s actions have harmed XRP investors and the broader crypto industry. He said that it is important to understand that a settlement doesn’t necessarily mean Ripple would agree to the same terms they would have agreed to two years ago.
He gave an example of a hypothetical situation and said that if the SEC were to issue a statement that all future sales of XRP are not securities in exchange for Ripple agreeing to pay $50M and not appealing the case, it could provide some certainty and clarity around the regulatory status of XRP.
“Quite a few people ask why would Ripple settle if they won. First, I didn’t say Ripple would agree to the same terms of a settlement they would’ve agreed to 2 years ago. It all depends on the ruling itself. Does Coinbase and Kraken immediately relist or wait for an appeal?”
This would be positive news for Ripple and its investors, as it could help to remove some of the uncertainty and legal risks that have been associated with XRP. Moreover, the return of liquidity to the US market could provide a boost to XRP’s value and adoption, which could benefit Ripple and its partners, including Bank of America.
“If Judge Torres’ decision is in Ripple’s favor and it facilitates liquidity to return to the U.S. and it causes U.S. businesses to not worry about pissing off the SEC if they use XRP, then that’s a different story.”
Overall, the outcome of the prolonged legal case will likely have significant implications for Ripple’s partners.
Coinbase Relist XRP Looms As CLO Agrees With “Investment Contracts” Argument
The XRP community is ecstatic over the recent price breakout from the macro logarithmic downtrend. The sixth-largest digital asset surged to a ten-month high of about $0.58 last week but has since retracted to trade around $0.51 on Monday. However, the decline is largely due to the 300 million XRP sold by Ripple in its monthly escrow release.
According to on-chain data, Ripple returned about 700 million XRP to the escrow account over the weekend. Ripple uses XRP sales to incentivize On-Demand Liquidity programs and its RippleNet customers.
Consequently, the XRP market benefits from deeper liquidity due to increased involvement from global institutional traders.
XRP’s Future Growth Prospects
The outcome of the Ripple vs SEC lawsuit significantly impacts XRP’s future growth prospects. United States SEC Chair Gary Gensler argued during a recent hearing at the House Appropriations Subcommittee on Financial Services and General Government that all digital assets apart from Bitcoin are unregistered securities. Gensler explained that almost all crypto assets have a group of people working towards their success, thus qualifying as a security.
Related: Ripple Vs SEC: Attorney John E. Deaton Predicts Timeline For Lawsuit Outcome – Coinpedia Fintech News
XRP, ETH, and Altcoins are Not Securities
Famous crypto lawyer John E Deaton analyzed the Howey test on digital assets and explained that XRP, ETH, and any other altcoin are not securities, despite undertaking ICO during their early stages.
“When the investor in Howey bought the [mango] grove, he bought it directly from the Howey Company. If that same investor had sold the [mango] grove to a second buyer years later, a buyer with zero knowledge of the Howey company and its involvement, the subsequent sale is not of security,” Deaton noted.
His sentiments were echoed by Chief Legal Officer at Coinbase, Paul Grewal, who noted that digital assets are not investment contracts. As a result, the XRP community has pushed for Coinbase to relist the asset on its trading platform.
Kraken Exchange Agrees to End US Crypto Staking and Pay $30 Million Fine To SEC
The Securities and Exchange Commission (SEC) has announced that cryptocurrency exchange Kraken will pay a $30 million settlement to resolve charges that it offered unregistered securities. The company has agreed to end its staking-as-a-service platform for US customers immediately.
According to the SEC, Kraken’s staking program was marketed as offering an easy-to-use platform and benefits to investors, including regular investment returns and payouts. The regulator has characterized the program as high-risk for investors, as staking-as-a-service providers offer very little protection.
In response to the SEC’s lawsuit, Kraken stated that it will automatically unstake all assets held by US clients, with the exception of staked ether, which will remain staked until after the Ethereum Network’s Shanghai upgrade. US clients will also no longer be able to stake new assets.
The SEC Chair, Gary Gensler, emphasized the importance of proper disclosures and safeguards for crypto intermediaries that offer investment contracts in exchange for tokens. He emphasized that staking-as-a-service providers must register and provide full, fair and truthful disclosure and investor protection.
Other companies, such as Coinbase, also offer staking services. The SEC’s action against Kraken sends a clear message to the marketplace that these types of services must comply with securities laws.
The recent announcement of the SEC fining Kraken for offering unregistered securities does not affect Coinbase’s staking program. According to Paul Grewal, Coinbase’s CLO, staking on Coinbase continues to be available and staked assets continue to earn rewards from the protocol.
Grewal emphasized that the difference between Coinbase’s staking services and Kraken’s is that Coinbase is not considered a security. The rewards earned by Coinbase customers depend on rewards paid by the protocol and commissions, whereas Kraken was essentially offering a yield product. Grewal believes that clear rules that distinguish between the two types of services would provide clarity for consumers, investors, and the industry.
The announcement of Kraken’s settlement comes at a difficult time for the cryptocurrency industry, with recent events such as the collapse of the FTX crypto exchange platform and the shutdown of an argument that NFTs fall under protected speech. The situation shows no sign of improving in the near future.
Bittrex Charged For Violating Sanctions, US Treasury Agrees To Settle
The post Bittrex Charged For Violating Sanctions, US Treasury Agrees To Settle appeared first on Coinpedia Fintech News
The Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) of the United States Treasury Department reported on October 11 that they had settled charges with the crypto exchange Bittrex. The cryptocurrency exchange was charged with breaking sanctions and failing to establish appropriate sanctions compliance measures from March 2014 to December 2017.
The violations were caused by transactions from “individuals reportedly situated in the Crimea area of Ukraine, Iran, Sudan, Cuba, and Syria,” according to US Treasury regulators. U.S. officials state that the transactions added up to $263M worth of cryptocurrency transactions that were in violation of the country’s financial sanctions.