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SEC vs Ripple | Is Crypto A Security, Commodity, or New Deal?

By IRUUR1 | INSTINCTUALISM | 28 Dec 2020


Following the example of all great predators, the SEC is going after a big enough prize to feed the establishment pride, while picking off what may be a weaker currency already facing other hardships in the market.

SEC Stalking In The Crypto Wilderness

The mighty predatory SEC herd dog pack, having subdued and centralized the formerly open range free market pasturelands of plenty, is moving into the cryptosphere wilderness of wonder. There they have found a tired prey, resting after a long hunt, searching for a spot to carve out it's niche in the growing wilderness environment.
Ripple was flourishing and holds much influence but has been declining from former capacity, relative to others in it's increasingly multi blockchain, contract environment, So it was foraging and adapting to fit the new climate and crypto species competition. But now that the SEC has begun to nip at them in the open brush, other crypto animals sense an opportunity to move in on market share.

What the Cryptosphere Inhabitants Are Saying

This article addressing SEC authority points to the SEC definition of all crypto, as securities.

Originally published on 2ndrew.Medium.com.

Ripple is on the naughty list this year, and they’ve already received their first lump of coal. The Securities and Exchange Commission has announced a lawsuit against the company and two of its executives, alleging that their sales of the XRP token constitute an unregistered security sale.

XRP is a cryptocurrency, but very different from Bitcoin. Instead of mining, Ripple’s founders simply poofed a hundred billion tokens into existence, and started selling them on the market. The company still controls some sixty percent of the total supply, and can sell up to a billion tokens every month.

Part of Ripple’s defense is entrenched in a curious bit of wordplay. In a letter addressed to employees, CEO Brad Garlinghouse reminded them “that XRP is a currency, and not a security,” as if these were two distinct categories. The point was further buttressed in the company’s legal response: “Other major branches of the U.S. government, including the Justice Department and the Treasury Department’s FinCen, have already determined that XRP is a currency. Transactions in XRP thus...

 

Ripple Is Relying On The Kris Kringle Defence Against The SEC. Good Luck With That.


The mocking in the article and shared by the other crypto inhabitants, based on Ripple's first defense against the SEC, is tinged with nervous laughter. The others in the cryptosphere, sense they may be next and their attention is glued to this ongoing fight, meant to possibly tame their own economic instincts in blockchain nature.
Enter the CFTC, who believes crypto is a commodity.

The Definition Of A Commodity

What Is a Commodity?

A commodity is a basic good used in commerce that is interchangeable with other goods of the same type. Commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity may differ slightly, but it is essentially uniform across producers.
Under this definition then, crypto's like a commodity can be said to be used as inputs in the production of other goods and services, like lending, publishing and of course, gaming among growing others.
Furthermore, it is interchangeable with other goods of the same type. Crypto's are also fundamentally the same across produces based on variations of the same cryptography fundamentals.

Commodity Futures Trading Commission | CFTC And Crypto

Apparently the CFTC feels that crypto is at least part commodity. But which part?

CFTC’s Latest Crypto Primer Highlights DeFi, Governance - Decentralized finance (DeFi) and crypto governance are among a growing list of topics the Commodity Futures Trading Commission (CFTC) is watching in the digital asset space, the CFTC said in a new primer. The regulatory agency published the primer Thursday as part of an ongoing effort to understand and explain the crypto industry. The primer …

CFTC’s Latest Crypto Primer Highlights DeFi, GovernanceRead More »

The CFTC according to Investopedia, has been expanding it's jurisdiction. WHAT A SURPRISE! "More recently, the definition has expanded to include financial products, such as foreign currencies and indexes. Technological advances have also led to new types of commodities being exchanged in the marketplace. For example, cell phone minutes and bandwidth."

The Intangible Crypto Elephant In the Wilderness

Crypto, blockchain solutions differ in one major way with a commodity or security. A commodity or security is generally a product of a net tangible asset.
Back to Investopedia now for a quick definition of a net tangible asset related to a stock or bond.

Understanding Net Tangible Assets

Net tangible assets are meant to represent a company's total amount of physical assets minus any liabilities. The calculation of net tangible assets takes the fair market value of a company's tangible assets and subtracts the fair market value of its liabilities. Tangible assets can include items such as cash, inventory, accounts receivable, and property, plant, and equipment (PPE). Liabilities include accounts payable, long-term debt, and other similar obligations.

For example, if a company has total assets of $1 million, total liabilities of $100,000, and intangible goodwill of $100,000, its net tangible asset amount is $800,000. This is derived by subtracting $100,000 in both liabilities and goodwill from the total asset number of $1 million.

Does that sound like Dogecoin to you? At first blush it may resemble Bitcoin or Ethereum, but certainly not all other crypto currencies and tokens. Doge is more like a pack of football trading cards, or coupons from a store. The U.S. Dollar value is a security based on output of value from the nation to back the currency, with tangible assets from their national taxable production

Commodities and Crypto.

Crypto is not like a bar of gold, or a bushel of wheat either. Though a bar of gold, like crypto may become many things, it will never be a bushel of wheat. The crypto is not anything. It is a coded idea that is sometimes a game finance and promotion tool. Sometimes, like Bitcoin or Ethereum, it is a billion dollars worth of intellectual property in the form of patented contracts which are ideas from various creators, designed to facilitate the tangible function of industry and commodities use. Sometimes cryptos change from one service to another.

 

Intellectual Property, Crypto, The Professional Political Class, and You

Back to good old Investopedia one more time.

What Is an Intangible Asset?

An intangible asset is an asset that is not physical in nature. Goodwill, brand recognition and intellectual property, such as patents, trademarks, and copyrights, are all intangible assets. Intangible assets exist in opposition to tangible assets, which include land, vehicles, equipment, and inventory.

Additionally, financial assets such as stocks and bonds, which derive their value from contractual claims, are considered tangible assets.

 

New Crypto Species In the Wilderness

Any crypto is really a patent invented by coder/inventors. Some coders individually and in teams/communities,  create and verify the integrity of many coded patents, tried out by other inventors in communities, then offered as coins and tokens which are designed to create funding for greater efficiency in various markets.
Any value that these currencies have in relation to dollars, is our personal speculation in the form of purchase to profit on the cost effectiveness, tied to each currency, in relation to eliminating costs to us and the public market, from unnecessary, overseeing; Third party, centralized, inefficient, controlling authorities, usually staffed by legions of middle men, women, or persons of many genders. All making money from their positions in the controlling system.

The System Is The Costly Inefficient Middlepeople

If I buy you a car, or lend you one of mine so you don't have to go through a series of controlling middlepersons to deliver goods, is that an SEC concern? What if every time I lend the truck or car I get it back under smart contract, in as good or better shape than when I lent it. Is that a regulatory matter? What if I want a few different cars for different needs and my only interest is to have them all returned in the best working order possible for my own use, and while they are in use to others. What if people want to buy the cars I own at top value because of the quality of them. This is important because this is the nature of crypto.

The Crypto Essence

Optimized to scale, crypto is anyone. Anybody who knows code, or knows someone who knows code, or can buy a code that is specific to them and their ability, can mount a token, exchangeable on the market, tied to whatever they do in life, it's value and purpose.
IRUUR1 is exploring creating a token on the Stakecube exchange, as token creation is one of their services. The token would be based on our publishing, our affiliates and sponsors, the quality of their products, and our information services. If the SEC, CFTC, and other middleman fronts decide to move in on crypto, they could potentially, in effect, regulate our speech. PublishOx, Minds, Discord, all are crypto publishers. The BAT token is an internet browser of all things. This is a lot of potential regulatory authority, just in publishing, based on association with crypto use, as a series of patented formulas for better intellectual property exchange.

We Are Ripple, And Ripple We Must

Theoretically on HOLO Chain, which IRUUR1 holds, a day laborer or contract worker with a community verifiable, smart contract code, can mount a token, under terms they can meet, to finance their education and job skills in the business community, and become a skilled craftsperson. A craftsperson with a token of value, potentially available for trade internationally. You could become a company with many other patented token formulas. How would that work?
Offering a token for sale based on personal job services, during and after skill upgrades could work as crypto expands. It would establish clients and networking ability to exchange your token among other day laborers with their tokens on a service blockchain, connected to client buyers and sellers who are holders of the tokens. Tokens would be interchangeable to holders on the chain for reduced rates and steady availability, rating etc, Tokens would be interchangeable on other chains as well, as HOLO is built to interconnect. Other chains are exploring this mini project token currency model and it will expand. Should the government middlepersons be mucking about in your life like that, simply because you came up with your own legally protected, individual patented code or formula, as your personal and intellectual property, to better your life outside of a more controlling and costly system?
This scenario of the tiny individualized crypto versus the regulatory giants may not be the case with Ripple today. But it is the regulatory potential in the crypto market place for each one of us, as a part of the economy going forward. This will play out as the publics coding and blockchain knowledge increases the inevitable potential of crypto, to expand, as a verifiable free market, personal asset of recognizable trade value, attached to personal, and network abilities, and motivations, connected to greater usefulness to and with others. This is the nature of crypto.

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