The underdog story of Ripple vs. The SEC
GM, we take the latest Web3 news and translate it into plain old English - so you can stay up to date, without your eyes glazing over.
In today’s edition:
The story of David vs. Goliath Ripple vs. The SEC and what it could mean for the industry
Meme stock - now accepting meme coins
RESOURCE: What is the ‘Metaverse’? Learn in less than 3:30
Using crypto for good
The story of David vs. Goliath Ripple vs. The SEC and what it could mean for the industry
How it started:
In 2020, The SEC took the blockchain company 'Ripple Labs' to court, claiming their crypto token 'XRP', wasn't a currency - but a security.
I.e: People weren't going to be using XRP the same way they would cash, instead they were incentivized to buy it in the hopes the company's success would see a rise in value of the token.
(the same way you might buy Apple stock in hopes that the next iPhone is a hit).
Which, to be fair, is probably the intention behind the majority of cryptocurrency purchases.
Ok, tokens, coins, shares, stocks...it's all just terminology - what's the big deal?
The big deal (in the SEC's eyes) is: that difference in terminology changes a lot of things.
To sell securities, a company needs to register with the SEC and verify the identity of each individual buyer, to protect from potential fraud.
Ripple (and just about every other cryptocurrency on Earth) have not done this.
How it's going:
Regulators and lawmakers haven't exactly looked kindly upon cryptocurrencies in the past, so when this all started - things didn't look great for XRP.
...but it looks like the tide may be turning in favor of Ripple.
The judge recently ruled the SEC released documents that may prove it hasn't been playing fairly, and instead cherry picking where it enforces regulations in the crypto industry.
How this could f#%k everything up:
The effects of XRP being deemed a security could have ripple effects (accidental pun, standing by it) across the entire crypto industry.
Ripple CEO Brad Garlinghouse recently outlined how a loss against the SEC could see most tokens trading on crypto exchanges be deemed as securities.
"If you determine XRP as a security of Ripple, we have to know every person that owns XRP … That’s an SEC requirement. You have to know all of your shareholders. It’s not possible."
This is kind of a polite way of saying 'Tread lightly. If you decided to take us down, you could set a precedent and take the rest of the industry down with us.'
(the risk being that over regulation could lead to a major loss of economic benefits for the US)
Let's all join hands and pray to the crypto gods that this doesn't happen.
Meme stock - now accepting meme coins
Remember about a year ago when literally everyone was talking about old school stocks like GameStop and AMC?
It all started when a wave of retail investors who followed the subreddit r/WallStreetBets, were inspired to pump the price of heavily shorted (i.e 'underdog') companies.
Well, since then one company in particular, AMC, has seriously embraced crypto.
This weekend they updated their app to allow payments in the two largest 'meme coins' Dogecoin and Shiba Inu.
Why this is cool:
It feels like we've all collectively been waiting for this meme-stock/meme-coin thing to disappear...but it hasn't.
Well established companies like AMC, GameStop, Tesla and Twitch have all embraced the likes of Dogecoin.
The longer it continues, the further it proves that online cultural movements, previously affecting siloed virtual communities, can have lasting significance in the real world.
Resource of the day
What is the ‘Metaverse’?
Learn in less than 3:30
Using crypto for good
Towards the end of February, Ukraine announced plans to raise crypto funds in the effort to fight off the Russian invasion.
Well, after 1.5 months and an estimated $100 million raised, they've started to deploy the funds!
Ukraine's vice prime minister, Mykhailo Fedorov, recently shared the fund's first purchase:
Ok, this a great - but couldn't Russia do something similar with crypto? Like, to say...dodge sanctions?
Theoretically, yes - but Treasury Secretary Janet Yellen said earlier this month that:
"we haven't seen significant evasion through crypto so far."
And just to be safe the European Union recently introduced a ban on providing high-value crypto-asset services to Russia.
So far, so good!
Your Daily Dose of Web3
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Square Enix’s president reiterates desire to make ‘play to earn’ blockchain games
Alright, that’s it for today!
Love to the family,