The SEC's Lawsuit Against Ripple and 2 Execs: What You Need to Know - Ep.208

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Stephen Palley, partner at Anderson Kill. and Gabriel Shapiro, partner at BSV Law, discuss the SEC's lawsuit against Ripple and two executives, Chris Larsen and Bard Garlinghouse. In this episode, they explain:

  • what was so "egregious" that the SEC went after two executives, Chris Larsen and Brad Garlinghouse, were charged
  • why their sales showed an information asymmetry, and why that matters
  • why the complaint comes close to being a fraud case, but why the SEC didn't charge them with fraud
  • why the idea that XRP is a currency and therefore cannot be a security will likely not fly
  • why it's unlikely the case will go to the Supreme Court
  • the SEC's case for why XRP is a security, and Ripple's role in it
  • how even on a technical level, the XRP network is centralized
  • how strong the SEC's case is against Larsen and Garlinghouse
  • Stephen's and Gabriel's predictions on how the lawsuit will play out
  • how this will likely impact XRP investors
  • whether or not Ripple could become an SEC-reporting company and XRP a security
  • what happened with Ripple's lead investor in its most recent fundraising round
  • whether or not the SEC might go after exchanges or other players who made money off XRP or collaborated with Ripple around XRP trading
  • what this means for Coinbase, in particular, because it's going public later this year
  • what Ripple's defense, in its summarized Wells submission, was
  • how this case compares to some of the other big SEC/crypto securities cases, Kik/Kin and Telegram
  • whether there might ever be a digital token that is determined to be a security for specific transactions but not others
  • what the wider implications of the case are for the rest of the crypto industry

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Episode links:

Stephen Palley: https://twitter.com/stephendpalley

Gabriel Shapiro: https://twitter.com/lex_node

SEC lawsuit against Ripple: https://www.sec.gov/litigation/complaints/2020/comp-pr2020-338.pdf

SEC lawsuit against Ripple being close to a fraud case: https://twitter.com/stephendpalley/status/1341523294344896515?s=20

Former SEC commissioner Joe Grundefest on the case: https://www.theblockcrypto.com/linked/89164/former-sec-commissioner-says-ripple-lawsuit-will-cause-multi-billion-dollar-losses-to-innocent-third-parties

Other lawsuit against Ripple: https://www.courtlistener.com/recap/gov.uscourts.cand.334410/gov.uscourts.cand.334410.115.0.pdf

Technical assessment of Ripple network: https://cryptobern.github.io/noconsensusripple/

Tetragon’s case against Ripple: https://twitter.com/stephendpalley/status/1346531087971999749?s=20

What the case means for exchanges: https://www.coindesk.com/coinbase-delist-xrp-exchanges-dilemma

Coinbase suspends trading in XRP: https://blog.coinbase.com/coinbase-will-suspend-trading-in-xrp-on-january-19-2e09652dbf57

https://www.coindesk.com/coinbase-suspends-xrp-trading

Lawsuit against Coinbase: https://www.bloomberg.com/news/articles/2020-12-30/coinbase-sued-over-xrp-commissions-after-sec-pursues-ripple?sref=m9L277rN

https://twitter.com/stephendpalley/status/1344352455895691269?s=20

People in the industry thinking for a while that XRP is a security: https://www.theblockcrypto.com/genesis/57366/xrp-is-probably-a-security-dont-at-me

Mary Jo White: https://www.coindesk.com/former-sec-chair-represents-ripple-xrp-lawsuit

Ripple’s Wells submission: https://ripple.com/wp-content/uploads/2020/12/Ripple-Wells-Submission-Summary.pdf

227 episodes