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Ripple vs. Everybody 💪🏽
Happy Tuesday everybody!
If you’ve been paying attention to the crypto markets recently, for the first time in what seems like a pretty long time, things are actually looking… up? Is it another bull-run or did something happen? It’s more so the latter, and we’re going to spend this week’s newsletter breaking down what happened in the world of crypto, starting with the showdown between Ripple and the SEC.
In addition to our breakdown of Ripple vs. the SEC, you can also keep reading to check out:
A company spotlight
Jobs in web3
Interesting news updates!
Ready to dive in? Let’s get it.
Ripple has come through with a huge win 🥊
Safe to say that the last couple weeks have been good for crypto, something we’ve missed seeing for a very long time, and that’s all thanks to Ripple (XRP). On July 13, the federal court ruled that the sale of XRP tokens on public exchanges were NOT sales of unregistered securities. This ran counter to the 2020 charges from the SECs alleging that all sales of XRP were securities transactions.
Trust us, we get that this all might sound a little complicated. So we’re going to break down exactly what happened and ultimately what it means for the broader world of crypto. So sit back, relax, and let’s get into it.
So wait - what is Ripple?
Founded in 2012 by Ripple Labs, Ripple is a blockchain-based money transfer payment network and protocol that operates on its native token, XRP. Together, they were designed to work together as a fast, cheap, and scalable peer-to-peer global payments system.
Compared to other popular coins on the market, XRP is one of the largest on the market, with the fourth-largest market cap at $39B (as of July 23). But unlike most cryptocurrencies, XRP is “premined” and has a maximum supply of 100 billion tokens.
Why was Ripple sued?
Over time, XRP started being used for all kinds of things, not just what they said. So, back in 2020, the SEC got mad and sued Ripple Labs and its CEOs. Why? Well, they claimed that Ripple did an unregistered IPO of XRP, treating it like a security and raising money without playing by the securities laws.
The SEC said Ripple sold XRP tokens to investors all around the world without going through the proper registration process. And not just that, the founders and CEOs allegedly did some shady personal XRP transactions worth around $600 million. They were also accused of using XRP sales to pump up their own company's operations… yikes.
So of course Big Brother, AKA the SEC, called them out for not following the rules and regulations on securities offerings, and this led them to some big trouble.
What happened with the lawsuit?
Since 2020, XRP and the SEC have been going at it – both sides trying to prove their point. But as of July 13th, 2023, in a significant win for the cryptocurrency industry, a U.S. judge ruled that Ripple Labs Inc did not break federal securities law by selling its XRP token on public exchanges.
This is officially the first win for a cryptocurrency company in a case brought by the U.S. Securities and Exchange Commission. It also gives ammunition to other crypto companies who are battling up against the SEC for similar cases. According to Ripple’s Chief Executive Brad Garlinghouse, this ruling is "a huge win for Ripple but more importantly for the industry overall in the U.S."
Is this what we call takeoff?! Let’s dive into what this means…
How did markets respond?
This great news for XRP was like the “secret stuff” in the Looney Tunes in Space Jam, because the markets bounced BACK! Following the news, a wide range of cryptocurrencies spiked - with XRP growing as much as 96% (as of July 19). Paul Grewa, Coinbase’s Chief Legal Officer, stated, “For exchanges, for tokens that are listed on exchanges, for regular investors, there’s no question that this ruling strikes a blow to the idea that somehow securities are being traded when people go onto exchanges and trade the assets.”
What does this mean for you?
Overall, the Ripple ruling is a big move for the crypto market. But we’ll be paying close attention to what this can mean for the long-term. What will this mean for the future of the crypto market? Will this set a precedent for how regulators view other crypto-related products and services? We don’t know yet, but trust that we’ll keep you posted on how all of this unfolds!
Company Spotlight: Ethena!
Today we want to highlight Ethena, a startup creating the first-ever internet bond and a stable coin that doesn’t rely on banks. Ethena recently raised a $6M seed round led by Dragonfly Capital.
We’re big fans of Ethena because they support the web3 community’s focus on building decentralized alternatives to traditional financial instruments. Their products have the potential to disrupt the stablecoin and bond markets, and they could help to make finance more accessible and inclusive for everyone.
Getting to the Bag: Jobs in Web3 đź’¸
Annnndddd we’re back with another curated list of jobs that are available for you to check out if you’re on the market! Check out some cool opportunities below:
What’s Happening in the News?!
Since we changed to a bi-weekly cadence, we also want to make sure that we’re keeping you in the loop on what’s happening in the world of deep tech. Here are 3 stories that caught our eyes over the past two weeks:
Have a great week everyone and, as always, thanks for reading!
– Kendall & Chad