Ripple/XRP-Ripple`s Legal Eagle Stuart Alderoty-Breaksdown SEC vs Ripple & ETH Decentralization

welcome back to the show everybody we got a great one lined up for you today guess what we have today we have stewart aldoradi from the ripple legal team having an incredible candid conversation and it's all about the ripple lawsuit with the sec and the current state of affairs of the market and really digging in in a very very candid conversation here i've grabbed the highlights from this like i said it was from yesterday and there's some incredible incredible points made through this thing as well as probably the best overview of this case right now that you could ever want somebody roll that beautiful intro this is digital perspectives with brad kimes subscribe for new content notifications now here's brad kinds come on in [Music] welcome back to the show everybody you can follow me on twitter at backup bradley above and everything that we're talking about here today let's take a look at a 2.6 trillion dollar market cap for crypto we're up 0.46 percent right now bitcoin is sitting at 60 000 plus ethereum 4300 plus and let's see here cardano at two dollars flat solana is at 197.16 and xrp of 106 this morning let's take a look at the actual range of xrp price here and again fiat links locking up with the amount of trades every minute here nothing just happened earlier in the week just a day or so ago and look i mean apparently it's a glitch on the website is all i can figure out but right now we're looking at 1.0615 of where the price is for xrp the low end of the range is at 1.0425 which is better than yesterday it dipped all the way to 98 cents but we still see that 10862 is the high side of the xrp range so that's where we are this morning now let me go ahead and bring this up here with uh stuart aldoradi and the gentleman here from the ubri which is the university of blockchain research initiative out at berkeley and it's adam sterling so and again this is a great conversation i'm going to go ahead and let this go and he really asked him for an overview of what's going on with the case so let's take a listen right here check it out is are these assets these these goods are they securities and so right that goes beyond the question of whether they're fraudulent or not that's right and to be clear the sec's case against ripple does not allege any fraud it doesn't allege any market manipulation it doesn't allege any fraud running front running it's a very technical question as to whether ripple's distribution of the digital asset and his xrp which began in 2013 um constituted in the distribution of an unregistered security and that's that that's the piece where i think the essays and i'll i can get into this part of the case because it's very public in terms of what our defense is that's the part of the case number one we don't believe xrp is what's called an investment contract and therefore security but if the sec is able to stretch the law that farm um there was no fair notice to a market participant that the law would be stretched that form and again we've got the halley case the orange grove case from 1946 and that's what everything tethers back to uh as to what defines an investment contract and what doesn't define an investment contract and the sec is fond of saying it's very clear gary genser gives a speech it seems like every day or every other day it's really clear go read howie but i would ask if howie is so clear why then did the sec have to issue a digital asset framework in 2019 that morphed three howie factors into more than 30 howie factors depending on your account uh hester curse the sec commissioner said that was the jackson pollock approach where you just throw a lot of factors on a canvas and there's no clear message and to make it worse in them if you if anybody is interested go back and read that guidance go back and read footnote 10.

They actually read one of the three howie factors out of the howie case common enterprise so not only do they confuse the law but they try to rewrite the law and then what are we supposed to make uh bill him and the former director of corps finn his speech in 2018 where he said ethereum that started out as a classic ico started out as a classic security capital raised somehow morphed to a non-security because of it the ethereum network is now decentralized you can and really quickly is and first of all if you haven't figured out stuart aldorati is putting it down like hard but let me show you this to go along with the decentralized point that he's making or not the centralized point of ethereum one second i'll pull this up here for you this is steven nerioff and i think i'm saying his name correctly but if i'm not forgive me but uh who is currently in jail we'll get to that in a second but this is the guy who was actually uh picked to figure out how to legally evade u.s regulations in u.s law listen to him brag about it right here from ethereum i was very very very fortunate uh that short not a couple years after that i got involved in a project called ethereum and i my job at that project was to figure out the legal framework within which to issue we were calling it a crowd sale at the time which has now become the ico and that was the genesis of the utility token i watch him pat himself on the back damn near break his arm to do it and uh so it's a law of unintended consequences as to what's kind of happened um and uh i'm just gonna we've been involved in a lot of icos since then i bet he had now take a look at this because this is the ethereum foundation has dug their own grave from who's an amazing researcher it literally says the eth product purchase in the eth product purchase agreement that the purchaser recognizes that the ethereum platform is presently being developed and may undergo significant changes before release security check and i'm going to show it to you right here shout out to for this one this is the purchase agreement in the early days to be a part of that you know project and to buy ethereum purchaser further agrees to accept sole risk of the purchase of eth and it says purchaser recognizes that the ethereum platform is presently being developed and may undergo significant changes before release now i don't know how else to say it right here but this is expecting to make profits on the backs of others i mean it is the howie test right so there you know let's keep let's go back now and get back with stewart aldoradi who continues to lay straight fire down check it out i find the word decentralization in the 1946 howie case involving our orange groves and i'm not sure that um uh policymakers are really equipped to understand when a network is or is not uh decentralized so the problem for the sec and it's really the problem for any regulator for that matter is you can't penalize a company and you can't penalize an individual where the regulator has not clearly communicated what their interpretation of the policy will be to the public and that's what has happened here come on and you can't see simply keep repeating as as the sec is now doing and gary gensler is now doing that uh the law is clear when um that's simply not true simply repeating that doesn't make it true and gary gansler again i don't need to keep picking on him keep going for the sec but he's been out there very publicly and he's saying well um the ones who are confused it's not only market participants but every sophisticated security lawyer in this country they're confused because they are getting paid by the industry to be confused so so gary's not the one who's confused it's the rest of us that are the dummies in the room right even the even the sophisticated lawyers that practice securities law that's what they just said right there it's amazing go stewart um i think that's a really unfortunate statement quite frankly i think it's an ugly statement i wish it was one that he didn't repeat but he um is hester purse is she a paige listen to this point is hester purse is she a page she'll is she just another securities lawyer for marcel street then he says elodroisman you know who actually are at the scc so he makes the point now that oh so the fact that hester and e lad roisman at the sec disagree with you and they're not practicing on the other side of the fence are these guys paid shills and don't understand the law either bob boyceman a patreon is brian quintes the former cftc commissioner at hill in government officials are crying out for this lack of clarity members of congress are crying out for this lack of clarity and gary genser on the one side is saying there's clarity but then in the same breath he's saying but i need congress to help me pass new laws to bring clarity to the space so you can't have it both ways you really can't have it both ways i'm going to tell you what that is straight fire from stuart aldoradi oh my goodness well we've got a lot more fire too let me line that up for us right now okay so this next spot here is a very important transition where it transitions to what happened to coinbase and their len product now listen to the setup here from adam sterling and then listen to the response stuart aldorati literally talks about how the sec has created what feels like a secret inquisition the way they draw you in to go talk to them and then they basically have this secret inquisition because you don't realize that you're sitting trying to figure out whether you need to be registered or not registered and they're building a case against you and even equates it to the creepy white van approach let's listen it's amazing filed a wells notice meaning the staff intends to recommend to the commission that the commission sue coinbase and open court and in a couple of things there you know in my reading of the coinbase lend product i think it is uncertain whether that product qualifies as a security based off of howie and reeves and other uh based off of howie and reeves again it's being mentioned whether something is a note this is a possible destination i believe for xrp uh um other things and and so my advice or if i was working with coinbase i'd say listen you are the most highest profile company in this space i think there is some questions about this product i could probably make an argument on both sides but you are risking and being that you're the kind of highest profile enforcement target for the sec there is some risk and so the kind of surprise and shock and saying well others are do it i just for me let's get right to it here because he's got a response coming up here and and i know it takes a while to set something up legally for a response but let's listen here guys by any of this and and i think it's this is how things work here the apparently expensive inverted assuming they count on people surrendering and which is unfortunate yeah they count on people surrendering because they don't have the money to be able to pursue it but they've picked on some of the biggest players in the space which is ripple and coinbase check it out and but let's talk about the coinbase thing for a minute so i don't know enough about the len product to opine on it but this is what i hear coinbase complaining about they say the sec says come on in uh talk to us the border's safe so you go in and you talk to them and then rather than having a convert and i assume coinbase hired the best lawyers to advise them on the lend product and how to get it right so you go in and have that conversation you have your best securities lawyers with you and rather than entering into a dialogue with the sec about what what the sec may think you have wrong and how you can fix it it turns into a secret inquisition it turns into an investigation i call it the creepy white panel dan approach to enforcement once you that's exactly how it feels it really does watching this i don't know if anybody could coin a situation any better in a phrase i'm telling you right now okay so now let me set up the next uh segment for you first of all this entire conversation is incredible but let me get you right now to this mark right here and let me set this up for you here we go okay so right here it addresses a lot of what we all went through when gary gensler came from mit to the sec and basically what we're going to hear now is uh uh stuart aldoradi really give you know the impression that we've all got we thought that gary ginzer coming from the mit understanding this tech really well was going to be an advocate to roll this out but instead has declared war on this space listen it may be because um uh because of how vocal gary gentler's been and i think there were some some you know cautiously optimistic folks coming from mit understanding technology maybe he would work more collaboratively with um with the industry it's clear that at least to me and i think to others that he used to clear all that war on this space i think that has woken up many policy makers that are saying not so fast so i do think yeah and not so fast is right and we know as recently as yesterday or the day before we saw uh the new chair for the cftc who is roston benham say that he believes that uh cftc should be the crypto uh cop on the beat because that is what they have been doing so this gets very interesting however i do remember a comment and i couldn't find out where i couldn't figure out which conference it was in but gary gensler had mentioned that eli um i'm sorry rosten benham from the cftc chair position before his nominee uh was sworn in day before yesterday or yesterday uh had agreed that they both had agreement on how to move forward even if they didn't have congress's approval so as much as it felt like that clip that we played from roston benham that he's going to help level the playing field here i'm not so sure ultimately so we need to really really brace ourselves where all this goes but let me line you up to the next clip here and like i said this entire conversation is great so shout out to adam sterling here uh i want to take you to the next spot here where he's really talking about is it going to take congress to do to say this thing is it going to take legislation and then he gives a really really candid comment on this and then we'll wrap this thing but you need to hear it for sure let me line this up for all of us here we go the kind of the the outlook is yeah i mean um that's a tough one adam i i mean i think actually getting you know legislation to the point where it's passed by both houses and signed that's a long haul no matter what the topic um uh crypto is a priority and obviously it's not the number one priority for congress but if we go back to where we started in terms of you know regulation 101 and what congress's oversight responsibility is i do think having these hearings having these conversations having these roundtables having these uh education sessions whether or not it actually leads to a piece of legislation that passes for um uh you know uh as law which i i think there's a reasonable probability that that could happen i think the conversation and the the policy the pressure that's brought by policy makers onto the process hopefully can lead to a rational regulatory outcome even short of the passage of the law although i think the passage of law is still very much on the table yeah it's absolutely neat yeah disagree that won't show me to this all roads don't meet to the sec on this one oh my goodness all roads don't lead to the sec on this one and i couldn't agree more because i really lean in heavily to the idea when it comes to ripple and xrp that that road for them may lead to the treasury and the reeves test may help them get there when something is a note and that doesn't mean that it has to be a security either it could absolutely be a note that is a non-security you know i'm a i'm a glass half full kind of guy we'll see where this goes but you know what one day this will wrap and this will end and imagine what this market for xrp looks like when it does i believe when this case is over and the treasury if it will speak on it this asset will be the most compliant vetted digital asset on the planet and who knows it may just even be a note that can be used as currency i'll catch all of you on the next one make sure you check out all the links in the description box and the comment section they are great products and services i use each and every day and they are trusted vetted links and there's some incredible deals but you got to click the links okay

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