While Ripple isn’t securities law violations, it is actually guilty of fraud and should be charged accordingly
In a Twitter thread, Messari CEO Ryan Selkis argues that while Ripple is not guilty of the aforementioned crime, it is indeed guilty of fraud and should be charged accordingly.
Ripple guilty of fraud, but not securities law violations
Ripple Labs has been fighting the US Securities and Exchange Commission (SEC) in an ugly court battle for almost a year now. However, the war is still raging. When the watchdog first accused Ripple of violating securities laws, many crypto communities supported Ripple.
However, Selkis argued that Ripple was guilty of fraud and should be charged accordingly.
“I am attacking and will continue to attack SEC leadership bc Gary Gensler is divorced from his agency’s mission and is not honestly pursuing solutions. SEC is fighting technical securities violations while ignoring the Safe Harbor, which would prevent fraud. E.g., Ripple”, he tweeted.
In a Twitter stream attacking the SEC’s leadership, the executive noted:
“Ripple isn’t guilty of securities law violations. IMO they are guilty of fraud. They misled XRP holders over insider token selling, selectively disclosed data, and hyped partnerships as value additive to the underlying currency.”
Source: Ryan Selkis/Twitter
Selkis also took some examples from Ripple’s business to demonstrate how the safe harbor proposition can benefit the company.
First, SEC Commissioner Hester Peirce has suggested that sufficient information be made available to third parties to verify the token’s transaction history. Selkis believes this would have ensured Ripple supported a freely available and forkable block explorer.
He then mentioned a point regarding documentation of all token transaction information that would take into account all of Ripple’s historical sales, along with lookups and discounts to business partners. Selkis argued that the proposal would allow tracking of the sale of XRP holdings by top Ripple executives, along with its affiliated platform.
He concluded that the proposal would have given Ripple three years to figure out a distribution and decentralization strategy.
“The company either would have cleaned up its ongoing reporting or face enforcement action for fraud. It would have been a pro-growth and pro-innovation strategy. He added that the executives would have improved their reporting or faced fraud charges, not mere securities violations”, he added.
As expected, reactions were quick to come by, with John Deaton tweeting:
Testifying before Congress, Gensler refused to answer whether or not he had read @HesterPeirce’s Safe Harbor, which means he hasn’t. The mere fact that he hasn’t even taken the small amount of time to read her Safe Harbor tells you everything you need to know about his intent.
— John E Deaton (@JohnEDeaton1) November 14, 2021
Selkis has long been critical of Ripple since way before the company was sued by the SEC. While Messari has previously referred to XRP as toxic waste, its founder had once published a report accusing Ripple of using its RippleWorks charity foundation as a tax shelter.
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