With the SEC-Ripple lawsuit nearing its conclusion, what is the outlook for the cryptocurrency market?
Host: Anchor Choo Hye-jung
Guest: Attorney Jin Hyun-su, managing partner at Decent Law Firm
Q. The SEC-Ripple lawsuit outcome is imminent... What is the outlook for the cryptocurrency market?
- Ripple Labs developed a remittance service using blockchain technology
- The SEC sued Ripple, claiming "XRP is an unregistered security"
- "Ripple Labs violated securities laws by selling XRP to individual investors"
Q. Why is the outcome of the Ripple Labs lawsuit important?
- The Ripple Labs lawsuit could shake the entire crypto market, not just XRP
- "The result of the Ripple lawsuit could set a global standard for crypto regulation"
Q. What is the current status of the Ripple lawsuit?
- The lawsuit between decentralized Ripple and the SEC is intense
- The U.S. SEC has urged an immediate ruling on whether Ripple’s XRP sales violated securities laws
- "Currently, the case is at the legal review stage concerning whether Ripple violated securities laws"
- "A conclusion could come as early as this year"
Q. What are the key issues in the Ripple-SEC lawsuit?
- Types of securities: • Debt securities
• Equity securities
• Profit-sharing securities
• Investment contract securities
• Derivative securities
• Depository securities, etc. - Investment contract securities (Article 4, Clause 6 of the Capital Markets Act): A contractual right indicating that a specific investor has invested money or other assets in a joint venture between the investor and others, and the profits and losses from the joint venture are attributed to the investor
- The U.S. Supreme Court's "investment contract" test: ① There must be an investment of money or other assets
② The investment must be in a common enterprise
③ There must be an expectation of profit from the investment
④ The profits must primarily come from the efforts of a third party
Q. Is a cryptocurrency a security?
- Whether a coin qualifies as a security is judged on a case-by-case basis
- SEC Chair Gary Gensler has stated that "Bitcoin is not a security"
- "Coins are sold after contracts are drawn up and the project's profits or progress are announced"
Q. Is Ripple’s XRP a security?
- The SEC claims Ripple violated securities laws with XRP
- Ripple argues that "XRP does not meet the criteria of the Howey Test"
Q. What about the security status of Ethereum and Dogecoin?
- "Ethereum is sufficiently decentralized, so it cannot be considered a security"
- "Dogecoin is more of an experiment and fun meme coin, so it’s unlikely to be classified as a security"
Q. What are the predicted scenarios for the outcome of the Ripple-SEC lawsuit?
- "There is a high possibility that XRP sales will be interpreted as violating securities laws"
- "Ripple emphasizes the ambiguity surrounding the concept of investment contract securities"
- "If XRP is classified as a security, Ripple could face fines or other economic sanctions"
