Fungible cryptos in secondary sales are not securities, Ripple tells SEC
Ripple, the blockchain company behind XRP, argued that fungible cryptocurrencies are not securities when transferred in secondary transactions in a recent letter sent to the US Securities and Exchange Commission (SEC).
In its May 27 letter, Ripple cited US attorney and crypto law thought leader Lewis Cohen to support its claim. In his widely cited 2022 paper, “The Ineluctable Modality of Securities Law: Why Fungible Crypto Assets Are Not Securities,” he wrote:
“[T]here is no current basis in the law relating to ‘investment contracts’ to classify most fungible crypto assets as ‘securities’ when transferred in secondary transactions.”
In his paper, Cohen explained that in secondary transactions, an investment contract transaction is generally not present. He further claimed that fungible cryptocurrencies “neither create nor represent the necessary cognizable legal relationship between” a legal entity and the holder that is the “hallmark of a security.”
Related: Banking groups ask SEC to drop cybersecurity incident disclosure rule
SEC’s “new paradigm”
Ripple also referenced SEC Commissioner Hester Peirce’s May 19 “new paradigm” speech. She said she’d been voicing her dissent with the regulator’s approach to crypto, adding:
“Having emerged from the crypto dissent years, I am glad to be able speak to you today as the head of the Commission’s Crypto Task Force about a rational and coherent path forward and a new paradigm at the SEC.”
Peirce said that the SEC’s “approach to crypto in recent years has evaded sound regulatory practice and must be corrected.” She also said that most cryptocurrencies are not securities, adding:
“Most currently existing crypto assets in the market are not [securities]. My supplemental answer is that economic realities matter and non-security crypto assets may be distributed as part of an investment contract, which is a type of security.”
Ripple’s long fight with the SEC
The SEC had viewed a large portion of digital assets as securities, with the regulator’s former chair, Gary Gensler, stating in 2023 that most of the crypto market falls under the securities bracket. This stance led to a protracted legal battle between the SEC and Ripple.
The lawsuit first began at the end of 2020, when the SEC took action against Ripple and its executives, claiming that XRP sales constituted unregistered security offerings. Still, after the government’s stance on crypto changed with the election of current US President Donald Trump, Ripple has mostly won the battle, with the SEC recently dropping its appeal against a ruling favorable to the company.
In its recent letter to the SEC, Ripple also cited a ruling in the case noting that “the court held that certain of Ripple’s historical institutional sales of XRP were investment contracts,” while the secondary sales were not. Furthermore, the judge “determined that XRP itself is not a security.”
Magazine: XRP win leaves Ripple and industry with no crypto legal precedent set
The debut of the Canary Capital XRP exchange-traded fund (ETF) is signaling renewed demand for altcoins, after the fund posted the strongest first-day performance of the more than 900 ETFs launched in 2025.
Canary Capital’s XRP (XRP) ETF closed its first day with $58 million in trading volume, marking the most successful ETF debut of 2025 among both crypto and traditional ETFs, said Bloomberg ETF analyst Eric Balchunas in a Thursday X post.
The new fund garnered over $250 million in inflows during its first trading day, surpassing the recent inflows of all other crypto ETFs.
Part of the reason behind the successful launch was the ETF’s in-kind creation model, according to ETF analyst Nate Geraci.
“A few people asking how it’s possible to have ‘only’ $59mil trading volume, but nearly $250mil inflows… The answer? In-kind creations, which don’t show up in trading volume,” wrote Geraci in a Thursday X post.
The in-kind redemption model enables the creation and redemption of ETF shares through the underlying asset, as opposed to cash-only transaction models. In this case, Canary Capital’s ETF shares can be exchanged for XRP tokens.
The US Securities and Exchange Commission (SEC) approved in-kind creation and redemption for cryptocurrency ETFs on July 29, Cointelegraph reported at the time.
Smart money traders rotate into XRP longs after ETF debut
The launch of the ETF inspired a bullish rotation among the industry’s most successful traders, as tracked by returns and labeled as “smart money” traders on the crypto intelligence platform Nansen.
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Smart money traders have added $44 million worth of net long XRP positions over the past 24 hours, signaling more upside expectations for the token.
The cohort was net long on the XRP token, with a cumulative $49 million, but remained net short on the Solana (SOL) token, with $55 million worth of cumulative short positions on the decentralized exchange Hyperliquid.
Related: Metaplanet’s Bitcoin gains fall 39% as October crash pressures corporate treasuries
“XRP is holding near $2.30, showing relative stability but still feeling the effects of declining liquidity and cautious investor sentiment,” Ryan Lee, chief analyst at Bitget exchange, told Cointelegraph.
“For now, the setup looks like a healthy reset, not the end of the cycle, with both SOL and XRP well-positioned to lead the next wave once confidence snaps back.”
Spot Bitcoin ETFs saw $866 million worth of negative outflows on Thursday, their second-worst day on record, after the $1.14 billion daily outflows on Feb. 25, 2025, according to Farside Investors.
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The multibillion-dollar scam known as “pig-butchering,” once treated as a consumer-fraud issue, has crossed a new threshold and is prompting concerns over national security.
In a podcast, Chainalysis head of national security intelligence, Andrew Fierman, and former prosecutor Erin West, founder of cross-sector anti-scam nonprofit Operation Shamrock, discussed how pig butchering is becoming a threat to national security.
“So if anybody is touching money in any way, you’re part of this. So you need to be prepared to understand the threat and the gravity of what’s happening on a national security level,” West said, highlighting the importance of education and awareness in combating crypto scams.
A pig-butchering scam is a long-term fraud strategy in which criminals attempt to establish trust with a victim, often through romance or friendship, before steering them into a fake cryptocurrency investment platform and draining their funds.
The growing scale of pig-butchering scams
In the podcast, the duo discussed how fraud rings across Southeast Asia operate dormitory-style scam compounds where trafficked workers contact unsuspecting victims, foster trust through romance and then push them into fake crypto investments with the goal of draining funds.
In 2023, the US Department of Justice (DOJ) seized about $112 million in crypto linked to pig-butchering scams. In a February report, Chainalysis said that pig-butchering scams increased by almost 40% year-over-year in 2024, while overall crypto scam revenue exceeded $9.9 billion.
In addition, one under-reported area of pig-butchering is that victims are often hit twice. The duo said in the podcast that after the initial scam, victims sometimes received follow-up contact from fake recovery firms claiming to assist in recovering the money.
“Once this happens to you, you will be put on a list […] and you are even more likely to get hit up again,” West said.
Fierman and West said these scams have matured into a transnational crime model, blending human trafficking, money laundering and crypto rails, making them far more complex than your everyday fraud.
Fierman suggested that blockchain’s transparency offers an opportunity for regulators, exchanges and virtual asset service providers (VASPs) to disrupt the scams.
“One of the benefits of the blockchain, at least as the mechanism for this, is that there is potential opportunity for disruption if it’s enabled right,” he said. “And the transparency of the blockchain gives that opportunity to potentially disrupt at the point of cash out.”
How authorities are stepping in
With the scams having a much wider impact, governments are stepping in. On Nov. 12, the DOJ announced the formation of a “Scam Center Strike Force” to target Chinese-linked transnational criminal organizations behind crypto investment fraud in Southeast Asia.
Simultaneously, regional law enforcement departments are enforcing freezes and sanctions to combat the issue. On Aug. 27, law enforcement in Asia Pacific (APAC) collaborated with Chainalysis, OKX, Tether and Binance to freeze $47 million in pig butchering funds.
The strategy is not simple, but it is clear. This is to disrupt the on-ramp and off-ramp points for scammers, sanction the facilitators and build private-public partnerships.
“My advocacy about transnational organised crime has been consistently: Use every tool in our arsenal. Sanctions, indictments, diplomatic pressure,” West said.
Related: Scammers posed as Australian police to steal crypto, authorities warn
Red flags to watch out for
Like many scams, there are ways to spot a pig-butchering scam. The scam often involves manipulating feelings, which means someone expressing strong feelings for you too quickly through online channels, especially without meeting, may be a scam.
It becomes more suspicious if whoever you’re in touch with refuses to share personal information or professional credentials.
One of the main signs it’s a pig-butchering scam is when the person starts asking for money, even if they claim it’s for an emergency.
This also takes the form of risk-free investments and easy money, often showing fake screenshots of massive profits to convince their victims to invest.
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Demand for Bitcoin and crypto-linked investment funds continued to decline Thursday, despite the long-awaited end of the 43-day US government shutdown.
US spot Bitcoin (BTC) exchange-traded funds (ETFs) saw $866 million in net outflows on Thursday, marking their second-worst day on record after the $1.14 billion daily outflows on Feb. 25, 2025, according to Farside Investors.
This marked the second consecutive day of outflows for the Bitcoin ETFs, as the end of the 43-day US government shutdown failed to reignite investor appetite.
The $866 million outflows occurred a day after President Donald Trump signed a government funding bill on Wednesday. The bill provides funding until Jan. 30, 2026.
Related: Metaplanet’s Bitcoin gains fall 39% as October crash pressures corporate treasuries
The lack of ETF demand is causing significant concerns among crypto investors, as these funds were the primary drivers of Bitcoin’s momentum in 2025, alongside Michael Saylor’s Strategy.
However, Bitcoin’s bull market is still intact until the price falls below the key $94,000 level, or the average cost basis of investors who bought Bitcoin in the past six to 12 months, according to Ki Young Ju, founder and CEO of crypto intelligence platform CryptoQuant.
“Personally, I do not think the bear cycle is confirmed unless we lose that level. I would rather wait than jump to conclusions,” wrote Ju in a Friday X post.
Other industry watchers argued that the four-year cycle theory is no longer relevant, given the introduction of Bitcoin ETFs and the new US administration.
“Since the launch of the Bitcoin ETFs and new administration, we’ve entered a new market structure,” wrote Hunter Horsley, the CEO of asset management firm Bitwise, in a Thursday X post.
“I think there’s a pretty good chance that we’ve been in a bear market for almost 6 months now and are almost through it.”
“The setup for crypto right now has never been stronger,” Horsley added.
Related: Taiwan premier promises Bitcoin reserve assessment report by end of 2025
XRP ETF outperforms all ETF launches in 2025, signaling underlying crypto appetite
Despite concerns over the market cycle, emerging altcoin ETFs are signaling underlying appetite for cryptocurrencies.
The Canary Capital XRP (XRPC) ETF launched on Thursday, as the first US-based ETF holding spot XRP (XRP) tokens, Cointelegraph reported.
The XRP ETF’s debut topped all other crypto and traditional ETF launches of 2025, signaling more demand for regulated altcoin funds.
“Congrats to $XRPC for $58m in Day One volume, the most of any ETF launched this year (out of 900), BARELY edging out $BSOL’s $57m,” wrote Bloomberg ETF analyst Eric Balchunas in a Thursday X post.
“The two of them are in league of their own, tho as 3rd place is over $20m away,” he added.
As for the other crypto funds, Ether (ETH) ETFs logged $259 million in outflows on Thursday, but the Solana (SOL) ETFs received $1.5 million in inflows, extending their 13-day winning streak, according to Farside Investors.
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