TechCrunch founder Michael Arrington comments on the case of the US Securities and Exchange Commission against Ripple.
In a new interview with Layah Heilpern, Arrington looks at the Howey test conducted in a Supreme Court case and determines whether certain transactions qualify as securities laws.
According to the SEC, when money is invested in a joint venture with a “reasonable expectation” that profits will be made from the efforts of others, an investment agreement is in place.
Arrington believes the test is out of date and irrelevant in the digital age.
“Whether something is a security or not, even if you ask that question, is just playing into the hands of the SEC. You want everyone to use their definitions to decide what is a security and what is not.
We buy cryptocurrencies in the hopes of making money when they are denominated in dollars. We do this because we no longer believe in dollars. Is that a security? Maybe I do not know. It depends because it’s not just about “is it a security?” Leave and the conversation is over. It’s “Is it a security?” And if that’s a perfectly legal definition, the SEC can really harm you.
I think it’s all securities in the sense that we buy all of these things because we’re trying to get into assets that will protect us from what the dollar is doing. But no, we’re looking at the Howey test, the hundred year old test that is absolutely useless in a modern world. It is ridiculous…
I think [XRP is] a security? From the SEC No.’s point of view. From my point of view, it just doesn’t matter. What is a security and what is not a security is completely irrelevant and it really only comes down to whether you allow only rich people to trade an asset or whether you allow anyone to trade an asset. “
Ultimately, Arrington hopes the lawsuit can give cryptocurrency companies clarity on how to legally operate in the U.S.
“I hope this gives us clarity on the regulations, but I think the SEC would like Ripple to put a feather in their cap dead. This is pure speculation, based on nothing more than speculation.
Also, the SEC is an entity that changes over time and is currently changing in relation to the SEC chairs. So what the SEC wants over time largely depends on what the executive wants over time and what is changing so I have no idea … I think the SEC probably wants us to go to court, and when it goes to court, we’ll see what happens, but I don’t know. ”
Arrington is the founder of Arrington XRP Capital, a digital asset manager founded in 2017 that invests in blockchain technology with XRP.
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