The SEC has charged Ripple Labs Inc. (the company behind the token XRP) with raising $1.3 billion in what it calls unregistered “digital asset securities”. Around 600 BTC were moved from an Mt.Gox wallet raising fears of 150,000 Bitcoin dump According to Whale Alert on Twitter, an Mt.Gox cold wallet just sent The bitcoin and cryptocurrency community, fiercely protective of its privacy, has been rocked by a massive data breach that’s seen the personal information of over 270,000 bitcoin and cryptocurrency users published online… Unfamiliar with cryptocurrencies? We highlight five benefits of shifting to a digital currency for businesses and individuals. XRP is traded on various worldwide exchanges, the lawyers asserted that transactions with the token “fall outside the scope of the federal securities laws.” Ripple CEO Brad Garlinghouse. The case is versus Ripple, Garlinghouse thinks that this is simply the first of many future SEC attacks on the whole cryptocurrency…
Jay Clayton, chairman of the U.S. Securities and Exchange Commission (SEC), wears a protective mask … [+] while speaking during a House Financial Services Subcommittee hearing in Washington, D.C., U.S., on Thursday, June 25, 2020. Clayton was surprised and dismayed by the political battle that quickly erupted over his pending nomination to be the top federal prosecutor in New York, said people familiar with the matter. Photographer: Brendan Smialowski/AFP/Bloomberg
The SEC has filed an action against Ripple Labs Inc. (the company behind the digital token XRP) with raising $1.3 billion in what it calls unregistered “digital asset securities”. While there was important short-term price movement across the board in terms of bitcoin, ethereum and XRP prices, the more important implications may play out long-term. It’s worth examining what this means for cryptocurrencies across the board and how theoretical and practical debates about decentralization are already playing out.
As always, this isn’t legal advice of any kind, but rather a walk-through and a bit of a deeper analysis of the news.
At a speech at the Yahoo Finance All Markets Summit on cryptocurrency, William Hinman, the Director of the Division of Corporation Finance at the SEC, specifically laid out that he didn’t think ethereum and bitcoin were securities.
Specifically, he said that “when I look at bitcoin today, I do not see a central third party whose efforts are a key determining factor in the enterprise.” He used similar logic to describe ethereum in its current state. The degree of decentralization he perceives makes a critical difference in the number of actions it can pursue — there is no CEO or organizing body with enough power in bitcoin to pursue in civil charges in the first place, something that is unlikely to change even with radically different leadership. With Ripple and XRP, this is clearly not the case.
While this isn’t a definitive ruling, and it was a speech given by somebody at a separate division than the Enforcement arm of the SEC, it does give a bit of insight into how some people at the SEC think about these matters.
It seems unlikely based on that thread of thinking that the SEC, responsible for the regulation of securities, will go after bitcoin or ethereum except for when they are used in ICOs or other security-like offerings.
In this case however, the relationship between parent company Ripple Labs and the XRP token it provides is what’s at question — and it seems clear that the SEC is investigating that very relation.
The SEC has gone after people offering what they classify as securities in the digital assets space before. Kik, the chat app company, was forced to pay out a fine of $5 million and to inform the SEC of any future sales of digital assets in the next three years in 2017.
The US District Court for the Southern District of New York ruled that Kik’s sale and proposed ICO of “Kin” were sales of investment shares and so violated federal securities laws. Telegram settled with the SEC to pay a $18.5 million penalty, while returning $1.2 billion to investors. EOS creator Block.One was forced to settle for $24 million in penalties, though they ultimately raised about $4.1 billion through EOS.
The SEC has a dedicated page to ICOs, with updates on different charges, from issuers to promoters — including charges laid out against John McAfee for promoting ICOs.
This latest action against Ripple and XRP is simply targeting the largest digital ledger asset they could have if ether and bitcoin are not securities —as of the publishing of this article, XRP was the third largest digital ledger asset by market cap on CoinMarketCap.
The most likely outcome seems to be a similar civil penalty or settlement as EOS, but that will depend on a lot of different variables — including how hard Ripple already seems to be prepared to fight. The EOS settlement was announced after the fact, while the charges announced now seem to indicate that negotiations have ground to a halt and that a looming fight between Ripple and the SEC is inevitable.
Ripple seemed to be ready to fight from the beginning. It preempted the SEC’s official announcement with the CEO, Brad Garlinghouse tweeting out before the official announcement with media mentions in the Wall Street Journal and Fortune that the SEC “voted to attack cryptocurrencies”. It seems clear that Ripple is going to be combative and deploy some of the funds raised with XRP to fight this case — and the case might go longer with more significant penalties than with either Kik, EOS, or Telegram as a result.
The SEC has been quite aggressive with this particular suit. They’ve listed individuals (including CEO Brad Garlinghouse) as part of the suit — specifically calling him out for making $700 million of personal profit.
Bitwise, a cryptocurrency fund, has already liquidated their XRP holdings because of this suit. OSL is a Hong Kong based exchange that has suspended all XRP payment and trading “immediately and until further notice.”
It’s possible that the most impactful effect will be the delisting of XRP on common exchanges such as Coinbase. They will be leery of selling an unregistered security and the penalties associated with that, as well as further dumping by cryptocurrency funds. This could lead to price shocks and liquidity problems for XRP. This is perhaps why, among other reasons, Ripple is fighting so hard — both against the SEC and against cryptocurrencies.
Part of Ripple’s argument has been a fight against a regulatory “duopoly” of ethereum and bitcoin — arguing that “China” controls both and that US policy should be geared to be more friendly to a domestically based parent company. This is a long-term thread where for many years, Brad Garlinghouse has claimed that the People’s Republic of China “really controls” bitcoin.
However, this risks alienating cryptocurrency communities, with Vitalik Buterin already commenting on this approach in a negative manner. Taking a projected unity movement and trying to turn the US government against bitcoin and ethereum will probably not win XRP many new fans in the cryptocurrency space.
Moreover, the argument about mining pool concentration is more subtle than to directly tie mining pools to the Chinese state, or to assume that mining pool loyalty is illiquid.
While there will be short-term price sentiment (Ripple has already lost about $2bn worth of value after the news), the long-term effect might be a broader shakening out and differentiation between ICO products and digital tokens that resemble the analogue governance models of before versus truly decentralized modes of node governance.
This might lead to businesses who have elements of the Ripple/XRP model to further avoid the US legal system and settle elsewhere — and it might lead people to think through very clearly what implications their governance and leadership has for the problems they’re trying to solve and the digital networks they’re trying to build.
Author: Roger Huang
Cryptocurrencies Price Prediction: Bitcoin, Ripple, & Stellar – Asian Wrap 24 Dec
According to Whale Alert on Twitter, an Mt.Gox cold wallet just sent 600 BTC to another wallet. Although this particular transaction is not that big, it has raised concerns that Mt.Gox might be distributing the 150,000 BTC left already.
In the past 24 hours, Bitcoin has dropped from a high of $24,100 to a low of $22,600. However, this movement is attributed to XRP which lost more than 50% of its value in the past 48 hours, dragging the market with it.
XRP/USD eases from the intraday top near 0.3058 to 0.2730 during early Thursday. In doing so, the Ripple pair fails to keep the bounce off key support lines while taking a U-turn from 200-day SMA.
The crypto major dropped to the lowest since late July the previous day amid fundamental concerns relating to delisting of the Ripple from Hong Kong’s exchange.
While fundamentals keep the bears hopeful, not to forget the pair’s inability to cross 200-day SMA, oversold RSI favors further consolidation of losses.
In the past 48 hours, the price of XRP plummeted down to $0.21 as the SEC announced it would sue Ripple. Although most of the market didn’t flinch at first, some cryptocurrencies like XLM got hit quite hard, losing 30% of its value within 24 hours.
Ripple investors have been worried about the SEC for years now. The debate on whether XRP should be considered a security or not continues. Similarly, some XLM holders are also worried that the digital asset might be considered one, now that Ripple has been sued by the SEC.
Author: FX Street
Massive Hack Exposes Bitcoin’s Greatest Weakness
The bitcoin and cryptocurrency community, fiercely protective of its privacy, has been rocked by a massive data breach that’s seen the personal information of over 270,000 bitcoin and cryptocurrency users published online.
The data, stolen from popular France-based bitcoin and cryptocurrency hardware wallet Ledger in a July hack, was last week published on RaidForums, a marketplace for buying, selling, and sharing hacked information.
Many bitcoin and cryptocurrency investors have since been subject to a barrage of phishing attempts with scammers using the data to try to trick users into handing over the keys to their bitcoin and crypto wallets—revealing bitcoin’s greatest weakness is the companies that help people store and trade it.
MORE FROM FORBESWhy This Former Billionaire And Goldman Sachs Veteran Now Sees Bitcoin Hitting $50,000 In 2021By Billy Bambrough
Bitcoin and cryptocurrency investors are often subject to phishing attacks, with scammers keen to … [+] get their hands on cryptocurrencies.
The hacked data includes customer email addresses, full names, phone numbers and postal addresses, according to Ledger. A vulnerability on the Ledger website allowed a “unauthorized third party” to access the company’s e-commerce and marketing database before it was spotted by a researcher participating in Ledger’s bounty program.
“End financial surveillance. Stop forcing companies to collect hackable jackpots of know-your-customer (KYC) data,” Balaji Srinivasan, technology angel investor and former chief technology officer at U.S. bitcoin and crypto exchange Coinbase, said via Twitter in the aftermath of the data dump, adding: “Privacy [is greater than] KYC.”
Regulations and tax requirements require companies to store certain information on their customers, often for many years. And while further regulation, such as the European Union’s General Data Protection Regulation (GDPR), is designed to protect user data, mistakes and vulnerabilities are inevitable.
“The combination of insecure centralized databases and current KYC laws sets up a situation where millions of people are predictably victimized by hackers to (maybe) prevent a few crimes,” Srinivasan tweeted.
Some of Ledger’s customers have received emails from scammers that include their name and address, threatening them unless they pay a ransom.
Phishing attacks and ransom demands have long plagued the bitcoin and cryptocurrency world, rising and falling in severity along with the volatile bitcoin price. Ledger, along with many other financial and technology companies, has tried to educate its users and the public about phishing attacks—but when people are involved, there will always be risk.
“[People] are definitely one of the weak links,” Ruben Merre, the chief executive of bitcoin and crypto hardware wallet company NGrave, said via email.
“They are an easy way into companies, through a targeted spear-phishing attack, one can isolate someone out, hack that person, and then from there get access to company systems. It is actually how most of the historic big security breaches occur. For example, a small vendor that has a huge platform as a customer might be the perfect entry point for a massive data breach.”
While bitcoin’s decentralized nature means there isn’t company or organization that can be targeted directly, centralized cryptocurrency exchanges, wallet providers, and other digital platforms will always be bitcoin’s greatest weakness.
Author: Billy Bambrough
5 Benefits Of Shifting To Digital Currency
Unless you’ve been living under a rock, it’s more likely than not you’ve heard of digital currencies like Bitcoin. A new approach to currency that has taken the world by storm, cryptocurrencies like Bitcoin have become the talk of the town because they simply that much more compared to paper currency and even traditional electronic banking. Operating on a technology called the blockchain, cryptocurrencies allow for fully anonymous and decentralized transactions that no central body such as a government or a reserve bank can control.
In this article, we are going to highlight five benefits of shifting to a digital currency for businesses and individuals.
The best and most attractive benefit of going for digital currency is that you won’t have to pay much in the way of fees for either international or local transactions. Something as simple as using your credit card for an international purchase can attract very steep fees. On the other hand, many people have chosen to go for digital currencies as they attract either no or low fees depending on the medium you are using. Because after all, It doesn’t feel very good to pay a huge amount of money just to make a simple transaction.
A problem with traditional currencies – very apparent in certain countries – is the tendency of central banks inflate the value of their currency in order to stay afloat. While this delivers some fiscal benefit at the international level, what it does in return is that the poor people in the country suffer from having their currency devalued. With digital currencies, there is no inflation increase as no one can control the currency. For example, you might have seen with Bitcoin that its values is not directly controlled by any singular body and instead responds purely to demand.
When you are dealing with paper currency in the form of a credit card, there is a problem of security, and people are often the target of fraud and scams. Credit cards often give their users a password and store their data in a database, which – no matter how many protections they put on it – can always be hacked. On the other hand, this can’t happen with digital currencies. You are given a temporary code for processing any kind of order. Even if the code gets in someone’s hand, it is only valid for a short period of time so that you don’t lose a lot of money.
As the national economies have connected and the world has become an interconnected financial mesh, digital currencies are rapidly transforming to meet the needs of an ever more complicated global market. Digital currencies like TRX can help you position your business in a way that you can mitigate economic fluctuations in a discrete geographic area and increase your revenue. Click here to buy TRX in Australia and serve worldwide customers without having to pay a huge sum of money every time you have to do a transaction.
Another problem with international transactions done through traditional currency is that it sometimes takes days for the funds to show up in your receiver account. These delays make business dealings very hard and create a barrier between companies and success. The speed of process associated with digital currency is a huge factor in its success as more and more businessmen are starting to opt for it to do their transactions.
Ripple SEC Charges Attack All Cryptocurrencies, Says Company’s CEO
XRP is traded on various worldwide exchanges, the lawyers asserted that transactions with the token “fall outside the scope of the federal securities laws.” Ripple CEO Brad Garlinghouse. The case is versus Ripple, Garlinghouse thinks that this is simply the first of many future SEC attacks on the whole cryptocurrency industry:” Let me be clear: Ripple, Chris, and I may be the ones called in the filing, but this is an attack on crypto at large. From there, you have a snowball effect; this isnt great news for any market maker, exchanges, and so on.
Author: Lillian Call