That’s actually not exactly what the decision in the Ripple case says: it says that certain types of transactions are not securities transactions, but some are. On the balance, the decision is probably reasonably regarded as a loss for the SEC I agree.
The uncertainty about how legislation should be interpreted in the case of novel facts is a fundamental aspect of the business of law and the courts and is not special to cryptocurrency; nor does it indicate special victimization of cryptocurrency practitioners.
When do facts stop being novel? There are hundreds of millions of crypto users worldwide, and more than a trillion dollars in value at stake. Cryptocurrencies have been around for more than a decade, and only in the past few years has the SEC begun to assert broad authority across the whole category.
Whether or not the crypto industry is victimized or not has nothing to do with my point, which is simply that the SEC has avoided clarifying the difference between security tokens and non-security tokens, while at the same time undertaking aggressive enforcement actions that depend entirely on where that line is drawn. I imagine that you and I agree on this?
> That’s actually not exactly what the decision in the Ripple case says: it says that certain types of transactions are not securities transactions, but some are.
Thank you for pointing that out. I added the qualifier exchange traded when referring to XRP in an attempt to highlight that distinction, but my terminology was imprecise.
As you note, the court identified the transaction as the proper level of analysis, and found that whether or not participants entered into an investment contract depended on the nature of the transaction, not the token.
Implicit in this mode of analysis is that the XRP token is never itself a security; rather, securities laws are implicated when the XRP token is part of an investment contract, where the investment contract is itself a security, but the underlying asset is not.
The uncertainty about how legislation should be interpreted in the case of novel facts is a fundamental aspect of the business of law and the courts and is not special to cryptocurrency; nor does it indicate special victimization of cryptocurrency practitioners.