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19th September 2022 > > SEC and XRP.


The SEC makes another land grab, and an update on XRP.

Market Snap

Market Wrap

h/t The Drop.

Leveraged longs getting liquidated overnight, exacerbating the sell-off. We are at the lows for the last 12 months in an environment of seemingly unrelenting poor economic news.

Occasional Series – Medium

I am a big fan of Medium, especially for crypto information. One must be a little circumspect – scammers abound – but my naturally sceptical bent holds me in good stead on that front.

An exciting thing happened this weekend on Medium.

My number of followers doubled overnight. Wowwee I hear you say. To be honest, in absolute terms (I went from one follower to two) that stat is slightly less impressive, but it is what it is.

This is out of character for me, but if anyone on the various CCC mailing lists are users of Medium, you now have a small window of opportunity to become my follower number three (

Curious Cryptos’ Commentary – The Securities Exchange Commission (SEC)

The day after The Merge, Gary Gensler, Chair of the SEC, made another of his regulatory land grab moves.

As background, regular readers know that all the relevant regulatory bodies agree that BTC is a commodity. In the past, before Gensler’s tenure, the SEC had agreed that ETH was also a commodity, a statement that has since not been repeated. Despite being questioned on this very point, Gensler has refused to make a definitive statement one way or the other.

The definition of a security is derived from the Howey Test, dating decades before computers were being used, and can reasonably be described as out of date. But it is the tool that is being used, so we must live with it.

As explained by CryptoPotato:

“The Howey Test – named after a landmark 1946 case that helped determine what is considered a security and what is not – states that a transaction becomes an investment contract if money is “invested in a common enterprise with a reasonable expectation of profit to be derived from the efforts of others.”

“If a transaction passes the Howey Test, it is considered an investment contract and needs to be registered with the SEC.”

Gensler has stated his opinion that the consensus mechanism now used by ETH, Proof-of-Stake (PoS), means that ETH is now a security, as ETH holders can stake ETH coins for passive staking income – “a reasonable expectation of profit”.

When Gensler was originally appointed Chair of the SEC, the CCC was all in favour of his appointment.

Which makes it all the more surprising at how much of a disappointment he has become.

Curious Cryptos’ Commentary – Ripple (XRP) update

The CCC has deliberately shied away from commenting on the two-year battle between the SEC and Ripple Labs.

I made that decision because of the hysterical, overreaction on Twitter from some XRP supporters. You may ask with justification what sort of other reaction has there ever been on Twitter, but trying to debate with some of these people is a little like trying to debate with the trans lobby i.e. it is simply not possible. They believe that there can only be one world view.

The battle of course is whether XRP was a security or not.

Some XRP maximalists seem to believe that their case is bolstered by arguing that ETH has been a security all along. I never understood that argument (if ETH is a security, you can be 100% sure that all cryptos including XRP but excluding BTC are securities) but in the light of the comment above, that may now be a moot point.

On Saturday both sides filed motions asking for a federal judge to make a summary judgement in the U.S. District Court Southern District of New York as to whether XRP is a security or not.

The CCC has always been a strong advocate for appropriate and targeted legislation and regulation for the crypto industry, to foster innovation and development, and to encourage both retail and institutional adoption, to drive value growth.

I believe it is in our interests that the SEC loses this case (though undoubtedly there would years of appeals to follow) so that the US increasingly moves to regulate most cryptos as commodities.

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