R3 sues Ripple

R3 Holdco LLC accuses Ripple Labs Inc. in breach of contract
09 September 2017   2089

Ripple Labs Inc. and the consortium R3 Holdco LLC resolves disputes in court on a contract concluded between organizations in 2016. This is reported by Reuters.

In accordance with a suit filed with the Delaware Chancery Court this Friday, R3 Holdco LLC accuses Ripple Labs Inc. in the failure to fulfill the terms of the contract for the purchase of the digital currency XRP.

So, in September 2016, the companies concluded a deal, according to which the consortium R3 was entitled at any time until September 2019 to acquire 5 billion XRP tokens at a fixed price of $ 0.0085 per coin. At the same time, according to the CoinMarketCap service, the current weighted average rate of XRP is $ 0.21.

According to the source, in June 2017 CEO Ripple Brad Garlinghouse tried to terminate the contract by sending a corresponding message to the head of R3 David Rutter via e-mail. However, R3 insists that Ripple can not terminate the agreement unilaterally, and asks the court to confirm all of its rights under the contract, including the purchase of XRP tokens at any time during the next two years.

In response, Ripple filed a counterclaim on the failure to comply with the terms of the agreement. According to it, both companies had to create a joint company with the the participating banks of R3 to test the technology developed by Ripple. The company also claims that R3 hid the fact that several members of the consortium, including Goldman Sachs and Banco Santander, planned to leave the group at the time of the agreement.

SEC May Signal Some Flexibility on ICOs

Looks like senior advisor for digital assets and innovation at SEC is not 100% against ICOs
14 December 2018   41

Some blockchain projects may be able to circumvent the requirements of US securities laws by contacting the Securities and Exchange Commission (SEC) for a so-called non-action letter. As SEC consultant on digital assets and innovations Valerie A. Szczepanik explained, such letters will not be issued often, but this does not mean that they cannot be received at all.

I think that’s a way forward for a lot of people who want to implement some of these things that may not exactly fit in the format of the rules that we want. 
 

Valerie A. Szczepanik

Senior advisor for digital assets and innovation, SEC

According to advisor, issuers of tokens have three ways to comply with the requirements of the laws: register an offer of securities, declare an exceptional case, or "make sure they're not a security."

In certain cases, the SEC may decide that “maybe this doesn’t fit the letter of our law or regulation but it fits the spirit and we can accomplish all the goals of investor protection”. In this scenario, the SEC may indeed issue such a letter, which will indicate that its employees do not recommend taking legal measures against a particular issuer.

The letters set forth exactly what the person plans to do or the entity plans to do and if it’s something that the SEC feels comfortable with we can release a no-action letter for exemptive relief saying ‘we can recommend no enforcement action.
 

Valerie A. Szczepanik

Senior advisor for digital assets and innovation, SEC

As reported, her remarks signaling a modicum of flexibility are notable in light of SEC Chairman Jay Clayton’s advice last month to anyone raising money by selling a token that they should “start with the assumption that it is a security.”

Speaking about the principles of recognition of tokens as securities, Valerie recommended to take into account the structure of sales. According to her, only in rare cases the token will not be recognized as a security. Most often, investors expect to profit from investments in such proposals, which is enough to recognize them as the spread of securities.