1st February 2023 > > LBC and XRP

tl;dr

LBC and what it might mean for XRP.

Market Snap

Market Wrap

The IMF (International Monetary Fund) has landed a broadside against the UK, claiming – with some justification – that elevated levels of taxation under Huntonomics will cripple growth prospects.

This is the same IMF that landed a broadside against the UK claiming – with somewhat less justification – that reduced levels of taxation under Trussonomics will cripple growth prospects.

Mainstream commentators have wondered aloud what the UK could ever do to satisfy the IMF.

The answer is nothing, as it is all my fault.

As a sturdy representative of all that is wrong in the increasingly defunct centralised world, the IMF takes some battering in the pages of the CCC. I think it a touch churlish that Kristalina Georgieva, Managing Director of the IMF, takes such criticism personally and vents her frustration on the UK economy in response, but it is what it is.

Curious Cryptos’ Commentary — LBC (LBRY Credits) and XRP (Ripple)

Committed readers of the CCC will recall that last November the SEC (Securities and Exchange Commission) scored what for its purposes it most likely would categorise as a significant victory.

Gary Gensler, Chair of the SEC, has made plain that he personally considers all cryptos – except for BTC and ETH – as securities, and it isn’t entirely clear his exact position with respect to ETH.

As Chair of the SEC, he has set his regulatory guard dogs on several chases, notably against LBC and XRP, though this does break with the long-held tradition amongst all regulators that regulation by court action is not only out of remit, but also extremely unsatisfactory in terms of providing clarity to innovators and entrepreneurs.

The LBC judgement appeared to conclude that the sale of LBC coins constituted a sale of securities and thus the sponsors and others were in severe breach of securities laws. Breaching these rules not only risks heavy financial penalties but also potentially lengthy jail sentences, two reasons why New York is a powerhouse in the financial world.

More pertinently, the LBC judgement looked as though it paved the way for the SEC’s success in its legal case that XRP is a security.

…

In an appeal hearing against the original judgement, Attorney John Deaton representing journalist Naomi Brockwell as an amicus curiae (friend of the court) requested further clarification of the judgement.

Specifically, he asked the judge to rule on whether all sales, or just primary sales, of LBC, constituted the sale of securities.

The judge concluded:

“Amicus, I’m going to make it clear that my order does not apply to secondary market sales.”

Boof!

…

Following this judgement, the waters are muddied even more than before, whilst also we can surely expect the SEC to appeal the appeal.

XRP proponents are naturally delighted by this turn of events, but it is just one way marker on a very long journey.

The key point is that once again, Gensler and his aggressive and confrontational tactics of regulation by enforcement have no place in a civilised society.