VC firm makes compelling argument why XRP is not security
In the ongoing legal battle, Ripple continues to win up new supporters. One of the most recent is Paradigm, a VC firm that supports Web3 and bitcoin businesses. After creating a record-breaking $2.5 billion fund in November of last year, Paradigm, one of the most significant investment companies in the cryptocurrency sector, saw its record broken in May by a $4.5 billion fund from Andreessen Horowitz. So, why would it be interested in the Ripple lawsuit? is raised by this.
Ripple Lawsuit: VC Firm Makes Strong Case Why XRP Should Not Be Considered Security
It’s robust argumentation noting;
-especially true for 2ndary markets
-no Fed Court has found investment contracts to exist w/o a legal relationship to issuer (!)
-brings up Hinman, Kik, Library.
I don’t know if their perspective is novel enough for the judge, but again, robust.
— WrathofKahneman (@WKahneman) November 12, 2022
According to Paradigm, the outcome of the Ripple litigation might have a significant impact on the development and management of crypto and Web3 businesses, which is why it has asked to submit an amicus brief.
The company claims that it wants to take part in the case because it is worried that a decision that casually adopts the terminology favored by the SEC could have significant and unanticipated consequences on Paradigm and other companies that aim to use new technology in a way that could benefit users.
On the surface, the dispute may concern whether certain XRP token offers and sales qualify as securities offerings. However, the SEC’s assertions that XRP tokens and, by extension, many other crypto assets are securities go beyond what it claims to require or what the law supports.
Paradigm contended that the SEC’s attempt to seek new authority through the court constituted a regulatory overreach in a document addressed to the court. The Howey test was misapplied as Paradigm’s significant point of contention. According to a thorough investigation, neither the SEC nor any federal appellate court has ruled that an asset that is the subject of an investment contract transaction is a security in and of itself or that a transfer of that asset would constitute a securities transaction.
According to a recent update by James K. Filan, two lawyers representing Paradigm Operations in the lawsuit—Kayvan B. Sadeghi and Shailee Diwanji Sharma—have filed appearances.
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