Japanese Financial Group SBI Holdings Says that XRP Is a Cryptocurrency, Not a Security

Alexander Salazar
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Japanese Financial Group SBI Holdings Says that XRP Is a Cryptocurrency, Not a Security

The financial institution supported Ripple Labs in response to the SEC’s lawsuit. SBI Holdings noted that it invests in shares of the company, but not in XRP.

Following the recent lawsuit that the US Securities and Exchange Commission (SEC) filed, Japanese financial group SBI Holdings supported its US trading partner Ripple Labs. The institution claimed that, under Japanese law, XRP is not a security but trades as a cryptocurrency.

SBI Holdings cited an article by Sadakazu Osaki, a fellow at the Nomura Research Institute, the largest in Japan. According to the text, XRP does not fall within the scope of the Financial Instruments and Exchange Law corresponding to securities.

The financial group noted that “Japanese law has established an interpretation according to which XRP is a ‘crypto-asset’ under the Fund Settlement Law.” They explained that the SEC’s lawsuit against Ripple will not affect the crypto asset.

The institution specified that it does not invest directly in XRP, but in shares of Ripple Labs as the parent company of the cryptocurrency project. The bank said that it does have a quantity of these cryptocurrencies available for the transactions that users make on crypto-asset exchange SBI VC Trade.

According to SBI Holdings, the strength of XRP is that remittances would be more efficient with the use of so-called distributed ledger technology (DLT) or blockchain. The bank explains that financial institutions can reduce the cost of international remittances, regardless of whether or not they use XRP.

The solution that Ripple offers is aimed at banks, and other institutions to conduct cross-border transactions. By using the crypto asset and its network, transactions between participants would occur faster than a traditional interbank transaction, which also reduces fee costs.

Ripple Could Leave the United States and Reach Japan with the Support from SBI Holdings

As a consequence of the friction that Ripple Labs experiences in the United States, the company is analyzing the possibility of leaving the country and operating abroad. The company’s current headquarters are in San Francisco, California.

In case there are doubts about SBI Holdings’ support for Ripple, the finance corporation reiterated that “the group will continue to actively support Ripple’s activities to expand the use of Ripple’s remittance solutions in Japan and abroad.”

The SEC’s case against Ripple erupted when the SEC filed legal action against the company, accusing it of trading unregistered security. The complaint estimates that Ripple has raised more than USD 1.3 billion from XRP sales since 2013.

The price of XRP in the cryptocurrency markets collapsed following the decision by the regulatory commission. A few hours after the lawsuit became public knowledge, the price of the crypto asset fell by 30%. It is currently trading at around USD 0.284627 per unit, according to data from CoinGecko.

By Alexander Salazar

Following SEC Lawsuit against Ripple, 9 US and European Exchanges Stop Trading XRP

Alexander Salazar
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Following SEC Lawsuit against Ripple, 9 US and European Exchanges Stop Trading XRP

The platforms that joined the movement and took the token out of operations include OKCoin and B2C2. Amid that exclusion, XRP receives strong support in Japan.

As a result of the lawsuit that the US Securities and Exchange Commission (SEC) filed against Ripple, nine cryptocurrency trading platforms from the United States, Europe, and Asia have withdrawn XRP from their operations.

The crypto asset, which had been gaining popularity in the banking sector, is no longer available for trading on the Asian digital asset trading platform OSL. It is also not included in the New York and Chicago operations of CrossTower and Beaxy, respectively.

Chinese cryptocurrency exchange OKCoin recently reported its decision to suspend XRP trading and deposits from January 4th, 2021. They said that the users who borrowed in the XRP/USD pair must repay the loaned amount before that date.

Bitstamp, which is based in Europe, also stopped trading the Ripple token. Swiss crypto asset manager 21Shares did the same, saying that their decision focuses on their corporate rules. They cannot include “any token that is a security or any token that may have liquidity problems.”

Cryptocurrency market maker B2C2 USA reported that it has canceled negotiations involving XRP with its US counterparts. However, the customers outside of the United States can trade the token, as long as they pre-finance all short trades.

Other crypto asset-trading platforms, such as digital asset bank Galaxy Digital and US company Jump Trading have also joined the movement and stopped their services with XRP. Jump Trading is one of the most active in the cryptocurrency market and is recognized for providing liquidity to exchanges.

Other trading platforms may progressively remove XRP from their operations, since those who keep the token listed run the risk of receiving lawsuits and fines if the SEC wins the lawsuit against Ripple. If the court finds XRP to be an unregistered security, the platforms that continued to trade the token would have to register as stock exchanges.

In recent days, the SEC stated that XRP is a security and filed a lawsuit against Ripple Labs, its CEO, Brad Garlinghouse, and its president, Chris Larson. The regulatory agency accuses them of earning USD 1.38 billion by selling unregistered security. They add that, in the process of selling XRP, Ripple should have complied with the registration requirements of the Federal Securities Act. Likewise, they should have reported regularly to the authorities, but they did not.

Ripple counters that multiple regulators, including the Financial Crimes Enforcement Network (FinCEN), have already certified XRP as a virtual currency. Therefore, they consider it to be outside the jurisdiction of the SEC.

XRP and Ripple Receive Strong Support in Japan

Exchanges in various parts of the world close their operations with XRP, but the token has received strong support in Japan. The cryptocurrency platforms of that Asian country have refused to exclude the Ripple crypto asset.

According to a note that Sadakazu Osaki recently published at the Nomura Research Institute, Japan’s largest economic research site, the SEC’s lawsuit against Ripple will have no impact in that country. XRP is in the category of crypto-asset under the nation’s Fund Settlement Act, so it does not fall into the category of security.

Financial firm SBI Holdings, one of the largest in Japan and a partner of Ripple, supported the explanation that Osaki outlined. They added that, given the treatment of XRP as an asset, the country’s exchanges will continue to trade the token, despite the accusations against Ripple for selling an unregistered security.

By Alexander Salazar

Paxful adds PaxBot, a bot on Telegram that Makes it Easy to Buy and sell Bitcoin

Jenson Nunez
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Paxful adds PaxBot, a bot on Telegram that Makes it Easy to Buy and sell Bitcoin

The service is free and it only requires having Telegram on a mobile phone. Both buyers and sellers of bitcoin can consolidate trades more easily thanks to PaxBot.

Paxful, a platform that enhances and permits an easier way to consolidate the purchase and sale of bitcoin (BTC) between people, incorporated PaxBot. This service allows, through the Telegram messaging application, to find offers faster and easier.

“Hello! I’m PaxBot and I’m here to help you find the best deals on Paxful ”, says the welcome message in the chat accessed after typing PaxBot in the Telegram search bar. After your friendly introduction, the bot asks, “Would you like to browse existing offers or subscribe to be notified when new offers are available?”

Subsequently, the program gives the user the chance to pick if he wants to buy or sell bitcoins, what is the fiat currency that he will use for the operation, and what will be the payment or collection method that he will use. Once the system gets the data, PaxBot displays links to open offers matching the user’s requirements.

The objective of this, according to the developer team, is “to search for offers an easier and more fun part.” “If there are no suitable offers according to your criteria, you can subscribe to receive a notification”, they indicate. In this way, the user will be able to know in real-time when a new offer appropriate to their preferences is available.

How to take advantage of bitcoin offers that the Paxful bot displays

Anyone who has Telegram on their mobile device can view the offers that PaxBot shows. But, to take advantage of them, the interested party must be registered in Paxful.

The procedure to do so is simple. For transactions up to USD 10,000, simply verify an email address and a phone number. If this limit exceeds, the bot will request other information.

The forms of payment available on this platform vary depending on the country in which buyers and sellers are located. Gift cards, bank transfers, debit or credit cards, PayPal, Western Union, and even payments with cash are available, there are even other useful methods.

The reputation of operators on Paxful can be seen when entering an offer. Thus, the user, before executing a transaction, knows how many positive and negative comments his counterpart has in this buying and selling market.

An advantage of Paxful over other bitcoin p2p (peer-to-peer) trading platforms is that its interface is available entirely in Spanish. With representatives in Latin America, they provide support in this language if there is a problem to solve or a question to answer.

Among Paxful’s innovations during 2020 are the incorporation of Tether (USDT) and Dollar on Chain (DoC). Both tokens maintain parity in their price with the US dollar. With these stablecoins, the user can stay out of the volatility of bitcoin and also protect himself from the devaluation of many Latin American currencies.

By: Jenson Nuñez.

Number of Pronouncements of Bitcoin’s Death in 2020 Decrease Due to Change in Narrative

Alexander Salazar
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Number of Pronouncements of Bitcoin’s Death in 2020 Decrease Due to Change in Narrative

In 2017, there were 124 pronouncements of Bitcoin’s death, according to records of Bitcoin Obituaries. This year, former detractors began to change their position on Bitcoin.

Even though it has a large number of believers, the pioneering cryptocurrency also has many detractors. Those pessimists do not hesitate to make pronouncements of Bitcoin’s death shortly. However, their crystal balls seem to be running out of energy, according to the records of 2020.

There were only 11 of these pronouncements in 2020, unlike in other years, according to Bitcoin Obituaries. This count compiles statements from analysts, commentators, and personalities from the financial world, who have pronounced Bitcoin dead in media or on social networks.

Anyone would think that the decrease in the number of “pronouncements of the death” of the cryptocurrency is the result of the bullish market that BTC has experienced this year. However, the year in which there were the most statements of this type among the “obituaries” was precisely 2017. That was the year of the historical bullish run in which the cryptocurrency first approached USD 20,000.

That year there was a record 124 statements against Bitcoin, almost 12 times this year’s number. The trend has been down since then, with just over 90 in 2018 and 41 in 2019.

The statements that disparage the present and the future of the cryptocurrency that Satoshi Nakamoto created include the following: “it is pure speculation”, “it is something worthless in the long term” and “its price will reach 0”. Others say more directly that “Bitcoin is finished. R.I.P.”

Curiously, almost half of the pronouncements recorded in 2020 occurred between November and December. They coincide with the latest momentum in price that led Bitcoin to break the USD 20,000 mark for the first time in its 11-year existence.

Bitcoin Acceptance in 2020

The reduction in the number of obituaries against Bitcoin coincides with a trend of acceptance of the cryptocurrency among former detractors. In addition to the fact that large companies with significant investments have entered, many have radically changed their position.

Ray Dalio, who held a strong position in favor of gold as a store of value, is one of the most prominent former critics of Bitcoin who now see its potential. In recent weeks, Dalio stated that the cryptocurrency could be a good investment alternative to gold.

Banks like Citibank have also been changing their position on it. In mid-November, a manager at that financial institution referred to Bitcoin as “the gold of the 21st century.” In addition, he predicted a rise in its price to more than USD 300,000 by 2021.

Companies that have historically been averse to Bitcoin have adopted it. A particularly relevant case is that of PayPal and the inclusion of cryptocurrencies on its digital payment platform.

The number of those who believe that Bitcoin will die in the future is decreasing. There are even estimates as encouraging as Willy Woo’s, according to which 30% of the world’s population will have some fraction of BTC in just four years.

By Alexander Salazar

While Visa Ranks Second as the World’s Largest Financial Entity, Bitcoin Is the First

Alexander Salazar
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While Visa Ranks Second as the World’s Largest Financial Entity, Bitcoin Is the First

In recent weeks, Bitcoin had already become the largest “bank” in the world. Bitcoin ranks number 13 in financial assets without distinction of category.

With a market capitalization of USD 505 billion, Bitcoin (BTC) surpassed Visa. The world’s largest finance company is valued at USD 497 billion.

At the time of writing this article, the price of Bitcoin is around USD 27,100 per unit. The pioneering cryptocurrency now leads the ranking of financial service entities, according to capitalization.

The price of Bitcoin has increased by 275% since January 1st, 2020 when it was trading at USD 7,200 per unit. In that period of time, the Visa share went from USD 188 to USD 213, that is, it had an increase of 13%.

The three finance companies that follow Visa are JP Morgan, Mastercard, and PayPal. The latter is valued at USD 276 billion and has nearly doubled due to the capitalization of Bitcoin, according to Google Finance.

Visa has an obvious advantage regarding its adoption as a means of payment. This company processed around 140.8 billion transactions in 2020, according to its annual report. In that same time, there were around 114 million transactions in Bitcoin.

Concerning the amounts transferred, even though the orders are smaller, Visa is also ahead. While the company claims to have processed payments for USD 8.8 trillion, there were transfers for around USD 0.7 trillion worth of Bitcoin.

The giant credit card network is no stranger to what is happening with Bitcoin. Two years ago, the company began studying how to enter the cryptocurrency market. “We continue to think of Visa as a network of networks,” said Cuy Sheffield, Visa’s head of cryptocurrency.

Bitcoin is the World’s Most Valuable “Bank”

Bitcoin had already become the world’s most valuable “bank” in mid-December when it surpassed JP Morgan. The halving that occurred in May and recent multi-million US dollar institutional investments in this crypto asset seem to have catalyzed its current bullish rally.

Taking into account all financial assets regardless of categories, Bitcoin ranks number 13, according to a list by CompaniesMarketCap.com. It should be above Berkshire Hathaway, Tesla, and Alibaba to be among the top ten. Something like this would happen if the other assets maintained their current price and if each BTC were worth USD 34,424.

If the forecasts by analysts like Willy Woo and the specialists of the Kraken exchange come true, this could happen and be even higher. They assume that each Bitcoin could be worth at least USD 200,000 in 2021.

Despite this, BTC should still increase its capitalization almost 24 times to outperform gold. The precious metal is the financial asset with the highest capitalization in the market, given that estimates are between USD 8 million and USD 12 trillion.

Some bitcoiners do not consider that seeing Bitcoin at the top of the list is something far-fetched. They believe that the cryptocurrency that Satoshi Nakamoto created will be the world’s next store of value. For example, well-known Bitcoin bull Anthony Pompliano is convinced that “Bitcoin’s market capitalization will exceed that of gold by December 31st, 2029.”

By Alexander Salazar

December Legal Review

Katrina Arden
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December Legal Review

When many people were getting ready to celebrate Holidays and say goodbye to 2020, the SEC made a few significant announcements that could affect its future work course. 

On December 23, 2020, Chairman Jay Clayton announced his resignation after more than three years of leading the SEC. His tenure coincided with the time of exponential growth of blockchain technology and the popularization of tokens. In the blockchain field, now former SEC Chairman Clayton will be remembered for his crackdown on the ICOs during which the SEC halted several unlawful token sales and exposed crypto fraud. 

One day before Chairman Clayton’s departure, the SEC announced that it filed charges against Ripple Labs Inc. and two of its executives, Christian Larsen, the company’s co-founder, executive chairman of its board, and former CEO, as well as Bradley Garlinghouse, the company’s current CEO. In its complaint, the SEC alleged that Ripple sold its tokens XRP to raise capital and finance the company’s business without the appropriate disclosures and procedure required under U.S. securities law. The SEC further alleged that Mr. Larsen and Mr. Garlinghouse, the largest holders of the XRP tokens, personally profiled approximately $600 million by misinforming the market and withholding valuable material information about XRP tokens and Ripple’s operations.  

The SEC charged defendants with violating the registration provisions of the Securities Act of 1933, seeking injunctive relief, disgorgement with prejudgment interest, and civil penalties. Immediately after the announcement, the XRP tokens started losing their value. Moreover, eventually, they will be removed from all exchanges.

Another case that was investigated during former Chairman Clayton’s tenure came to light on December 28, 2020, when the SEC announced the filing of emergency action and obtained an order imposing the asset freeze and other emergency relief in connection with the fraud related to cryptocurrency trading fund Virgil Sigma Fund LP. According to the SEC complaint, the founder of Virgil Sigma Fund LP and several affiliated entities, Stefan Qin, personally and through those entities, defrauded the public by making false statements about the fund’s operations, its strategy, assets, and financial conditions. As alleged in the complaint, Mr. Qin also attempted to use the investors’ funds for his personal needs. 

As a result, the SEC charged Mr. Qin and the affiliated entities with violations of the antifraud provisions of the federal securities laws seeking permanent injunctions, including conduct-based injunctions, disgorgement with prejudgment interest, and civil penalties.

The SEC continues to work on several crypto-related cases, which were initiated during former Chairman Clayton’s tenure. However, the new chairman will be determining the SEC’s focus and its priorities. 

On December 28, 2020, Elad L. Roisman was designated by President Donald J. Trump as Acting Chairman of the SEC. According to his press release, Acting Chairman Roisman appeared to be committed to working full force and to maintaining the course started by former Chairman Clayton. However, Elad L. Roisman is known for his more favorable position towards blockchain and crypto-assets. Although this is a temporary appointment that can change after the Presidential inauguration, we are hopeful that, in addition to its law enforcement actions and focus on the investors’ protection, the SEC will be leading new regulatory efforts to allow the complete integration of crypto into our lives. 

One of such steps was already taken on December 28, 2020, when the SEC issued a statement and request for comment asking the public to provide its opinion regarding allowing the broker-dealers to perform the full set of broker-dealer functions concerning digital asset securities. The statement highlights the issues that currently exist and suggests a number of steps that could be taken by broker-dealers to address the unique attributes of digital securities and minimize the risk to investors and other market participants. The SEC lists seven specific questions relevant to the challenges that broker-dealer could face and encourages everyone to provide the answers. 

If you want to get involved and provide valuable input, you can do so by completing the online comment form at https://www.sec.gov/rules/submitcomments.htm or sending an email to [email protected]. 

This summary is provided by international attorney Katrina Arden. Attorney Katrina Arden spoke at the leading tech conferences, authored legal articles and participated in discussions with multiple countries’ regulators on the development and implementation of the blockchain and cryptocurrency law.

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