SEC v XRP: The SEC is not rolling over
HERE we are in so-called Uptober and what we have is a pretty dramatic crash all round in the crypto markets.
Interestingly, in general terms, Bitcoin has been the least affected (though if you were betting on it going up you were sadly mistaken).
Now we have had perhaps the most telegraphed event in the saga that is SEC Versus XRP (strictly speaking Ripple Labs) which is the SEC appealing Judge Torres decisions last year and earlier this year.
As I said at the time the decision was originally in two parts, the first part saying the original sales of XRP to institutions and others meant it was being sold as a security, and the second part that secondary sales on exchanges were not securities. How that could even be I cannot imagine, but it is what it is.
I also noted how accommodating Ripple was being and how nice they were being to Gensler, but that hasn’t helped them much.
In the event, SEC crypto enforcement chief Gurbir S Grewal will leave on October 11, which seems to me to be a pretty interesting coincidence. He has been very hard-line and I’d be pretty confident it was he who decided to go for it.
My opinion would be that it was the right decision – the one thing all parties need in the crypto world is clarity, and we do not have that in this case. His deputy is interim leader of the pack, so we shall see. XRP promptly fell about 18%, but that is hardly surprising, particularly in view of the general market rout.
The SEC recently pointed out that the biggest frauds from 2022 have pretty much all resulted in long prison terms for the perpetrators, for example FTX, Binance and Terra, and their over-arching ambition is that if you are storing assets in an account ledger (whether TradFi or crypto) the investor has to be protected.
I couldn’t agree more. I could think of nothing better than there being a levy on all crypto trades (albeit very small) that would go to a central fund, like there is in the TradFi world. That would do wonders both for confidence and adoption, but also for how regulators would regard the 'bad boy' that is crypto.
Bitcoin dominance, despite the recent falls, is still the highest it has been for more than three years, and I don’t see that changing anytime soon. Bitcoin stands at over 58% of the total market, with ETH just under 14%. At 72% of the market, if you are running a crypto fund you better keep those two as your foundation.
In general terms you would have to think that the upcoming Presidential election is going to give people pause in the crypto market. Do you believe what Trump says? If so are you a raging Bull. Or do you take a more measured approach with Kamala?
Either way, the one thing I think we can all agree about is the world is a very dodgy place at the moment... I notice British nationals are being advised to take great care in Dubai.
It doesn’t take much to destroy confidence.
