SEC Drops Lawsuit Against Ripple Executives | Change Of Crypto Strategy?

It has been reported that SEC is no longer pursuing civil charges against Ripple executives Christian Larsen and Brad Garlinghouse. SEC vs XRP litigation was one of the longest cases SEC has had against a crypto entity, project or endeavor. Back when SEC started its case against XRP and Ripple, it wasn't really clear what regulators intentions were regarding crypto overall. However, its stance against crypto became obvious when SEC decided to go against multiple crypto companies, created confusion regarding the standards used in categorizing crypto projects securities or commodities, unwillingness to approve bitcoin spot ETFs etc. While SEC did show its cards and deployed resources to slow down crypto progress in the US, it has also failed to make any good case in courtrooms. They lost multiple cases. Among the cases SEC have lost was their case against Ripple and XRP.

The decision in SEC vs XRP case was one the important ones and was welcomed by many in crypto world. However, the decision was not 100% for or against XPR. The ruling was that when XPR was sold to investors directly it was a security, but when XPR was purchased on exchanged it no longer was a security. Gary Gensler tried to present it as a win or half win for SEC, but also expressed disappointment about the overall decision. SEC was determined to continue that litigation and appeal the decision. The decision still was a win for XRP. Today's news that SEC is dropping their lawsuit against Ripple executives is another win for XPR.

Similarly, SEC lost a case against Grayscale. In this case Grayscale was the one that sued SEC for not approving, delaying, and not giving proper attention for their application. The ruling was against SEC, and it was indeed found that SEC didn't not follow due process in reviewing Grayscale's application and not using same standards as applied to all other cases. In this case as well SEC was determined to appeal the decision. However they have reached a decision not to pursue and appeal. While it doesn't automatically grant Grayscale an ETF they were going for, it does suggest they have a good chance of getting it approved at some point. Otherwise they will probably see each other in courtroom again.

SEC has several other active cases. Since most of the SEC's cases follow similar logic and arguments, it doesn't seem like SEC will find any luck in courts anytime soon. For many people their lawsuits don't even make sense, and that is because of SEC failure in creating a clear framework in reviewing crypto. They have been asked by crypto companies, politicians, legislatures to introduce more clarity on how they review crypto cases and what standards they use. Until now it is still not clear at all. In fact, SEC actions of this year introduced more confusion than before. This has become even more obvious during one of the congressional hearing where Gary Gensler failed to truthfully answer simple and direct questions. He kept repeating the same answer - "We follow and enforce existing securities laws." This answer was used many times by Gensler to avoid answering real and important questions. He has done same in multiple interviews as well. This has been very disappointing to see, especially from a university professor who taught a class on blockchain, bitcoin, and crypto technologies.

So what does SEC's dropping lawsuits mean? Does it mean they are finally realizing they have lost? Or is it simply a change in strategy, and temporary retreat. Or could it also mean SEC have achieved their initial goals of creating confusion and delaying crypto progress in the US. Their actions did drives companies and exchanges away from US. Many crypto exchanges and companies specifically mentioned SEC's lack of clarification on crypto and SEC's hostile actions against crypto entrepreneurs. Many had to close their platforms for US customers due to these reasons.

I am not fond of SEC. Neither am I fond of many crypto exchanges, their executives, etc. I don't think exchanges like Binance, Bittrex, Coinbase and others actually care about the decentralized systems and crypto technologies. Their actions have proven many times that they are in it for money. They have found their niche business models and it worked for them for many years, and did produce great returns. However, none of them have demonstrated any leadership in decentralization and support for it. Quite the opposite has been their actions. Although they do like to present themselves as pioneers in the space. They are not honest players. Neither is SEC. SEC hasn't shown anything to believe they have been acting in good faith, and their actions were actually motivated by their duty to protect investors and consumers.

Now the good news is the debate around bitcoin being a security or commodity has been settled. There is nothing none of these participants can do against bitcoin. They can either participate in this decentralized network, and watch the network grow from sidelines. SEC has been delaying the decision on bitcoin spot ETFs. Now that there are many more who are interested stop ETFs and SEC's friend BlackRock also wants to have one it seems it is only matter of time when it can become a reality. Bitcoin spot ETF is not a new thing. Other countries already have them. Moreover, bitcoin network itself doesn't about about spot ETF. It will go on regardless. However, introduction of bitcoin spot ETF may bring large amounts of funds into bitcoin and make investing in bitcoin accessible for many more.

Michael Saylor explains the effects of bitcoin spot ETF the best. According to Saylor, currently large funds managers don't have an easy way to invest in bitcoin. They wouldn't need to go through long process of pitching the idea, receiving approvals, and securing funds and then buying bitcoin. This process may take a year, and creates too much of unnecessary obstacles for fund managers to even consider it. With stop ETF, these fund managers would be able to through millions into bitcoin without even spending a penny. Since they have prior arrangements and agreements with big banks, they have credit lines for tens of millions that they can use for investing without any approvals. In such scenario, even those who haven't been planning to invest in bitcoin would probably speculate for short term. Regardless, there will be billions pouring in. But also, this will create another way for retail investors to invest in bitcoin as well.

Another stream of cash may be coming into the bitcoin network and/or other decentralized networks because of massive generational inheritance. Older generations have developed trust and habits of investing in traditional markets like stocks and bonds. These investments have served most well over years and decades. Why change the strategy that has worked for long time. This may still be the thinking of many in older generations. Nothing wrong such reasoning. It does make sense. However, because we humans don't live forever, eventually all accumulated wealth will end up being inherited by younger generations. These generations most likely will consider bitcoin and crypto as a viable investment option, or diversification option, or even the best investment. Regardless of how much they would decide to invest, I would guess it would definitely be a lot more than before. This doesn't mean older generations do not understand bitcoin or blockchain technologies. Many obviously do. Many already invest too. Just because we don't like to change habits, it may just be more convenient to utilize strategies that have worked instead of adopting new ones.

I am curious what US government will do with their bitcoins. I believe they still hold a lot of bitcoins that were obtained through confiscations, criminal cases, etc. Last I heard, US government was one of the biggest bitcoin hodlers. They may end up auctioning them. I am sure many would share my thought when I say it may just be better to keep the bitcoin for the US treasury as a long term investments. Perhaps in the future these bitcoins could help in paying off the national debt. I believe there is benefit in investing in bitcoin for governments around the world as well. Bitcoin rewards all participants. While some countries are considering alternative payment options to USD for international trades, they fail to see that the solution is already here.

Bitcoin, the trustless decentralized network has proven to be secure and works a lot better than fiat, gold and other assets. Countries can be confident that their reserves would preserve their wealth and maybe even increase it, they would have full control over their funds, and can settle any and all international trades without a need to trust their counterparts and fulfilling their parts of the deal. Not only governments, but banks may also be amont those who can benefit from bitcoin network. Now it may seem that bitcoin is in competition with banks, and banks may lose control and profits. They may not realize not that there are better and honest opportunities for them in adopting the technology and the money system.

Congratulations Ripple! I don't really invest in XPR, even though it was the very first coin I have bought after bitcoin.