Debate Continues Over SEC’s Wording in Ripple Appeal Documents
by James Jung, Block Media Reporter
The wording of some appeal documents filed by the US Securities and Exchange Commission (SEC) with the court in the Ripple case is causing ongoing debate.
According to reports from foreign media outlets such as G-Crypto and The Crypto Basic, the document presented by the SEC to the court contains the phrase “it is recognized that digital assets such as Ripple (XRP) guarantees.”
Eleanor Terrett, a reporter covering the Ripple Labs and SEC lawsuit for Fox Business, shared part of the document on Twitter and explained, “The SEC has admitted that digital assets are not securities in themselves.”
To provide context for the controversial expression in the document, Block Media has obtained the original text:
Defendants argue that there is no substantial basis for a difference of opinion between the Order and Terraform because both cases apply to Hawaii and both cases argue that the asset underlying an investment contract transaction is not in itself is a guarantee. DE 889 at 3. That argument is invalid. The SEC did not argue here or in Terraform that the asset underlying those investment contracts is necessarily a security (and the SEC does not seek appellate review of any holding that the non are the underlying assets here nothing but computer code with no intrinsic value ). See also Telegram , 448 F. Supp. 3d at 379 (“While useful as a shorthand reference, the security in this case is not simply the Gram, which is little more than an alphanumeric cryptographic sequence”). The different organizational posture of the two cases does not matter either. See DE 889 at 3. Just as the facts in Terraform were treated as true—effectively undisputed—for purposes of that motion, the facts here were in fact undisputed.
The phrase quoted in the report, stating that “the SEC recognizes that digital assets are not securities,” is actually part of a sentence that refutes the arguments of Ripple and Terraform Labs. Both defendants argued that the asset underlying an investment contract transaction is not itself a security. The SEC dismissed this claim as “invalid,” leading to the sentences in question.
In essence, the SEC stated that the subject of an “investment contract” in these cases was merely computer coding. They never claimed that this coding itself was securities or that the subject matter had to be securities. The SEC added that the subject of an investment agreement does not have to be securities.
Therefore, while the SEC is appealing to the court, their intention is not to decide whether XRP is a security or not. The focus of the lawsuit revolves around the alleged violation of securities law through the sale of XRP as investment contracts to institutions and individuals.
The SEC also cited the example of the Gram coin issued by Telegram in the past. They won the lawsuit against Telegram and imposed a substantial fine. The SEC clarified that even in the Telegram case, the Gram coin was not considered simply securities, but rather a list of cryptograms.
Ultimately, the appeal of the summary judgment in the Ripple lawsuit, stating that “XRP sold to institutions is equivalent to an investment contract,” has no direct correlation to whether XRP is considered a security or not. It remains uncertain whether the phrases in the SEC’s interim appeal application document will work in Ripple’s favor during the actual appeal trial.
It is also difficult to conclude whether the SEC has completely abandoned its claim that “all coins are securities.” Although the SEC acknowledged that the Gram coin itself was not a security, but a list of cryptographic sentences, the extent of their position regarding other digital assets remains unclear.
References:
- G-Crypto
- The Crypto Basic
- Fox Business
- Telegram
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SEC Court Controversy Answer… Is it correct to confirm that ‘Ripple (XRP) is not securities’?
[블록미디어 James Jung 기자] Debate continues over the wording of some of Ripple’s appeal documents filed by the US Securities and Exchange Commission (SEC) with the court.
On the 19th (local time), some foreign media outlets, such as G-Crypto and The Crypto Basic, reported that the document presented by the SEC to the court contained the phrase “it is recognized that digital assets such as Ripple (XRP) guarantees.”
Fox Business reporter Eleanor Terrett, who covers the Ripple Labs and SEC lawsuit, also shared part of the document on X (Twitter) and said, “The SEC has admitted that digital assets are not securities in themselves themselves,” he explained.
Block Media secured the context of the controversial expression in the document. Here is the original text:
Defendants argue that there is no substantial basis for a difference of opinion between the Order and Terraform because both cases apply to Hawaii and both cases argue that the asset underlying an investment contract transaction is not in itself is a guarantee. DE 889 at 3. That argument is invalid. The SEC did not argue here or in Terraform that the asset underlying those investment contracts is necessarily a security (and the SEC does not seek appellate review of any holding that the non are the underlying assets here nothing but computer code with no intrinsic value ). See also Telegram , 448 F. Supp. 3d at 379 (“While useful as a shorthand reference, the security in this case is not simply the Gram, which is little more than an alphanumeric cryptographic sequence”). The different organizational posture of the two cases does not matter either. See DE 889 at 3. Just as the facts in Terraform were treated as true—effectively undisputed—for purposes of that motion, the facts here were in fact undisputed.
Among them, the phrase quoted in the report that “the SEC recognizes that digital assets are not securities” is the following sentence.
The SEC did not argue here or in Terraform that the asset underlying those investment contracts is necessarily a security
Fox Business reporter Eleanor Terrett also marked the next sentence with a red box.
(and the SEC is not seeking appellate review of any holding that the underlying assets are nothing more than computer code with no intrinsic value).
However, if you read the first part of this sentence, the SEC used the phrase to refute the opposition of Ripple and Terraform Labs.
Both defendants (Ripple and Terraform Labs, the defendant in the other lawsuit) argued that “the asset underlying an investment contract transaction is not itself a security.” security.)
The SEC dismissed this claim as “invalid” (That argument is invalid) Then the sentences in question appear.
The SEC stated that the subject of an ‘investment contract’ in these cases was merely computer coding, and never claimed that this itself was securities or that the subject matter had to be securities. He added that the subject of an investment agreement does not have to be securities.
In other words, when Ripple and Galli House sold XRP coins to institutions and individuals, the act itself was an investment contract, allegedly violating the Securities Act.
So, while the SEC is asking for an appeal to the court, it is not intended to appeal to decide whether or not XRP is a security.
At the same time, the SEC presents an example of the Gram coin issued by Telegram in the past. The SEC, which won the lawsuit at the time, imposed a huge fine on Telegram.
The SEC said, “Even in Telegram’s case, Gram coins weren’t just securities. Gram Coin was just a list of cryptograms,” he wrote.
In summary, the appeal of the summary judgment of the lawsuit against Ripple that “XRP sold to institutions is equivalent to an investment contract, and sold through an exchange” has nothing to do with whether XRP is considered a guarantee or not. there isn’t
You could write this argument as “the SEC recognized that XRP was not a security,” but it seems far from the central issue contested in this lawsuit.
This is because a series of actions involving the sale of XRP are investment contracts, and whether the securities law has been violated is the crux of the lawsuit. It is also unknown whether these phrases appearing in the SEC’s interim appeal application document will work in Ripple’s favor in the actual appeal trial.
It is also difficult to conclude whether the SEC has backed away from its claim that “all coins are securities.” In the case of Gram Coin, the SEC has already stated that the coin itself is not a security, but a list of cryptographic sentences.
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good article to look at
SEC Court Controversy Answer… Is it correct to confirm that ‘Ripple (XRP) is not securities’?
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