Ripple legal team opposes SEC appeal over XRP decision
Lawyers representing Ripple in its lawsuit with the United States Securities and Exchange Commission (SEC) have suggested the regulator hasn’t met the requirements to request an appeal.
In a Sept. 1 filing with U.S. District Court for the Southern District of New York, Ripple’s legal team said the SEC’s grounds for an appeal largely rested on “dissatisfaction” with a judge’s decision that the XRP token did not qualify as a security for sales to retail investors. The lawyers said “exceptional circumstances required for interlocutory appeal” were absent in the case, and called on the judge to both deny any request for an appeal or stay.
“The SEC has not even attempted to meet the standard for a stay, even after the Individual Defendants identified that omission in their pre-motion letter,” said Ripple. “The Individual Defendants write separately to oppose the SEC’s request. Ripple joins that opposition.”
In August, the commission moved to appeal and stay a July court decision in which Judge Analisa Torres ruled XRP largely was not a security under SEC guidelines. At the time, the SEC argued there was “substantial ground for differences of opinion” on the laws at issue.
The SEC filed its lawsuit against Ripple, CEO Brad Garlinghouse and co-founder Chris Larsen in December 2020, prompting many exchanges to delist the XRP token to avoid possible legal entanglement. Following the Torres’ ruling, many of the same firms said they would relist the token or explore doing so in the future.
“It’s sad that so many in the US crypto community have to resort to the legal process to prove this SEC is out of control and consistently wrong on the facts and the law,” said Garlinghouse in an Aug. 29 X post.
Related: SEC v. Ripple: Attorneys leave SEC side, both groups add new lawyers
The SEC has targeted a number of crypto firms in 2023 over allegations of securities violations, including Binance and Coinbase. On Aug. 29, asset manager Grayscale achieved a court victory against the SEC following an appeal ordering a review of its application for a spot Bitcoin (BTC) exchange-traded fund.
The civil lawsuit between the SEC and Ripple is ongoing. Torres proposed a jury trial for the case starting in the second quarter of 2024.
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Strive Asset Management, founded by entrepreneur and former presidential candidate Vivek Ramaswamy, has revealed plans to transition into a Bitcoin treasury company.
According to a May 7 announcement, Strive is going public through a reverse merger and plans to use the combined company’s stock to accumulate Bitcoin (BTC).
The deal will see Strive merging with Asset Entities — a social media marketing company listed on the Nasdaq. The combined entity will operate under the Strive brand and use its access to the public equity markets to finance Bitcoin purchases, the company said.
Once the deal closes, Strive plans to issue approximately $1 billion in equity and debt and use the proceeds to accumulate BTC. The asset manager “intends to use all available mechanisms to build a Bitcoin war chest […] and build a long-term investment approach designed to outperform Bitcoin,” it said.
Strive plans to allow “Bitcoin holders to contribute Bitcoin in exchange for public stock through a structure that is intended to be tax-free,” it said. As of May 7, the company manages approximately $2 billion in net assets across a variety of funds.
In December, Strive filed to list an exchange-traded fund (ETF) investing in convertible bonds issued by MicroStrategy and other corporate Bitcoin buyers.
Related: Trump-linked Strive files for ‘Bitcoin Bond’ ETF
Corporate Bitcoin treasuries
Corporate Bitcoin treasuries have become popular since the approval of Bitcoin exchange-traded funds (ETFs) on Wall Street. Companies pioneering the Bitcoin buyer approach, such as Strategy have seen their share prices surge by 350% in 2024.
Analysts say adding Bitcoin to corporate treasuries can “potentially be a valuable hedge against growing fiscal deficits, currency debasement, and geopolitical risks,” asset manager Fidelity Digital Assets said in a 2024 report.
Corporate Bitcoin treasuries collectively hold roughly $74 billion worth of BTC as of May 7, according to Bitcointreasuries.net.
Trump connection
Ramaswamy, an outspoken ally of President-elect Donald Trump, founded Strive in 2022. Its stated goal is to help investors “harness the power of capitalism,” according to Strive’s website.
In 2023, Ramaswamy — who largely earned his $1 billion net worth from biotechnology startup Roivant Sciences — campaigned against Trump in the Republican presidential primary. He later endorsed the president-elect.
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At least some of the top holders of Donald Trump’s memecoin who apply to attend a private dinner with the president could be based outside the United States.
According to a May 7 Bloomberg report based on an analysis of the top TRUMP tokenholders, 19 of the top 25 wallets on the leaderboard used foreign exchanges that exclude US-based customers, suggesting either foreign nationals or Americans living abroad. In addition, more than half of the top 220 holders — the group eligible to apply for a dinner with the president — also used exchanges in other countries.
As of May 7, the identities of the top tokenholders and those who might choose to apply for the May 22 Trump dinner and “special VIP tour” were unknown. However, the project stated that anyone who applied could not bring guests, had to pass a background check, and “can not be from a [Know Your Customer] watchlist country.”
The implications of having dozens or hundreds of memecoin holders potentially tied to foreign governments and interest groups have raised ethics concerns from some US lawmakers, claiming that Trump was engaging in “pay-to-play” corruption. At least one senator has called for the president’s impeachment, saying Trump was “selling access for what are effectively payments directly to him.”
Memecoin concerns are slowing crypto legislation
Democratic lawmakers in the House of Representatives and Senate have already been pushing back against considering any crypto-related legislation until Republicans address concerns around “Trump’s crypto corruption.” The Senate is expected to vote on a bill regulating stablecoins on May 8, and House Republicans recently introduced a discussion draft of a digital asset market structure bill.
Related: Trump-backed USD1 is now the seventh-largest stablecoin worldwide
Then-president-elect Trump launched the memecoin on Jan. 17 — three days before taking office — followed by the first lady introducing her own token. Two companies connected to Trump control roughly 80% of the memecoin’s supply.
The launch of the memecoin and its potential influence over the president and his agenda has already prompted some companies to get on board. On April 30, a trucking logistics management company announced a $20 million investment in the TRUMP token, suggesting influencing Trump’s trade war between the US and Mexico, where the firm conducts much of its business.
Magazine: Trump’s crypto ventures raise conflict of interest, insider trading questions
USD1, the US dollar stablecoin launched by the President Donald Trump-backed World Liberty Financial (WLFI), has become the seventh-largest stablecoin worldwide in just two months since its launch.
WLFI’s snapshot vote for a USD1 airdrop proposal is underway, and USD1’s market capitalization has continued to climb.
Launched in early March with a $3.5 million supply, USD1 has expanded into a market cap of $2.2 billion at the time of writing, leaving rival stablecoins First Digital USD (FDUSD), PayPal USD (PYUSD) and Tether Gold (XAUT) behind, according to data from CoinGecko.
Although rising fast, the USD1 market cap is still far from the market value of major stablecoins like Tether’s USDt (USDT) and USDC (USDC), whose market caps are worth $149 billion and $61 billion, respectively.
BNB Chain drives USD1 issuance
Trump-backed USD1 is almost exclusively issued on Binance-backed BNB Chain. According to data from BscScan, as much as $2.1 billion of all USD1 supply is issued on BNB Chain, accounting for more than 99% of its total circulating supply, while an Ethereum-based version accounts for just $14.5 million, according to Etherscan.
USD1’s latest market spike was sharp, jumping 1,540% from $128 million to $2.1 billion within two days in late April, according to CoinGecko.
The spike came days before Eric Trump announced that Abu Dhabi-based investment firm MGX would use the USD1 to invest $2 billion in Binance.
Justin Sun-backed HTX among the first CEXs to list USD1
As USD1’s market cap spiked, some centralized exchanges (CEXs) rushed to list the Trump-backed stablecoin.
HTX, a crypto exchange closely associated with Tron founder Justin Sun and formerly known as Huobi, announced the listing of USD1 with permanent zero-fee withdrawals on the BEP-20 network on May 6.
According to websites like CoinGecko and CoinMarketCap, HTX was one of the first CEXs to list USD1, as the token is primarily available on decentralized exchanges, including PancakeSwap and Uniswap.
Most WLFI inflows come from outside the US
While the WLFI community has been voting on the USD1 airdrop, some reports suggested that WLFI investment is mainly coming from outside the United States.
According to a poll by V1PS founder Notaz.Sol, as much as 90% of WLFI investors are likely coming from non-US jurisdictions, including Europe, Asia and Latin America.
A May 7 Bloomberg report also indicated that over half of the top holders of Trump-branded memecoins reside abroad.
The USD1 stablecoin’s growth lines up with Trump’s pro-stablecoin agenda announced in his executive order on “Strengthening American leadership in digital financial technology” in January.
While WLFI has been closely associated with Binance, both Trump and Binance have repeatedly denied and criticized reports suggesting any links or deals between the parties.
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