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Lawsuit Against Ripple Raises Interesting Concerns about the Purpose of XRP tokens

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A class lawsuit has been signed by an investor against Ripple. The investor claimed to have lost funds while trading the XRP cryptocurrency alleging that Ripple (the startup technology company managing the XRP token) is in violation of federal and state laws on security.

The investor who goes by the name Ryan Coffey was represented in court by James Taylor Copeland who is a San Diego based attorney. According to Coffey, the lawsuit issued on Thursday in San Francisco County Superior Court was intended to speak on behalf of other investors as well. Coffey claims that the rest of the investors represented in the lawsuit also bought Ripple (XRP) tokens and lost their investments in the long run. The lawsuit was issued against Ripple, a company headed by Brad Garlinghouse and registered under a South Carolina limited liability license as a company with 10 unnamed partners.

Ripple Under More Scrutiny

This comes just weeks after Ripple Labs and Garlinghouse came under scrutiny over the clarity of the relationship between the XRP tokens and the company Ripple. According to Ryan Zagone who is the director of Ripple’s regulatory relations, “there’s no direct connection between Ripple the company and XRP.” He said this on Tuesday to a UK parliament committee.

The XRP token has had various ups and downs in the crypto space and it has managed to capture the attention of many cryptocurrency investors and traders both in the retail sector as well as the institutional sector. Last year alone, the coin gained a market capitalization of over $140 billion only to fall back again below the $35 billion mark as of this publication.

The Thursday lawsuit came to light after Ryan Coffey’s lawyer tweeted about it.  However, the lawsuit has led a fresh rise of concerns over whether the XRP token is a security or not. In fact, there have been reports issued by a major cryptocurrency exchange questioning the real purpose of XRP even as the mother company brings in partnerships with industry-leading companies such as MoneyGram, Microsoft not to mention close to 100 banks registered on its RippleNet platform.

Ripple on the Defense

While Ripple was on defense on Tuesday, more skepticism arose from the hearing with the complaint arguing that,

the development of the XRP Ledger and the profits that investors expected to derive therefrom were and are based entirely on the technical managerial and entrepreneurial efforts of Defendants and other third parties employed by defendants

This argument, based on the realization of the XRP token as securities issued by the Ripple company was met with a contrary comment received by CoinDesk after reaching out to Tom Channick, the head of corporate communication at Ripple, who said that it’s the Securities and Exchange Commission that decides on whether an asset is a security.

Basically, the US federal law requires that a company seeking to sell securities should first register with SEC. After all, it is the duty of the Howey Test to qualify financial instruments as securities based on the 1964 Supreme Court case standards.

The lawsuit, however, sheds light on the uncertainties surrounding the relationship between XRP and Ripple. In his comment to CoinDesk, Chammick also added that although they have seen the lawyers tweet, the company “has not been served”. He went on to say that Ripple management does not consider XRP to “be classified as a security”.

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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.

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Blockchain-Focused ETF Arrives on London Stock Exchange

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The crypto community is still waiting for the US SEC to approve Bitcoin ETFs, with speculation which application might get approval being one of the hottest topics in 2018. However, come 2019, the US government shutdown dragged on, and the Bitcoin ETF request which had the most potential to see a grant got withdrawn by the very companies that submitted the application.

While the question of BTC ETF remains hanging in the air, blockchain-focused ETFs seem to be a different matter entirely. In a recent announcement by an independent investment managed firm called Invesco, the company has stated that it was about to launch the largest blockchain-focused ETF in the world. They managed to go through with this plan, and the ETFs have reached the London Stock Exchange today, March 11th.

The exchange-traded fund includes a portfolio containing as many as 48 different firms which are bringing exposure to the emerging technology. Among them, there is Taiwan Semiconductor Manufacturing, which is a well-known creator of chips used for crypto mining, as well as the CME Group, which is the first regulated exchange in the US which launched Bitcoin futures. There are many other well-known companies as well, such as Intel, Microsoft, and others.

Chris Mellor, the Invesco’s head of ETF equity product management in Europe, said that blockchain has a huge potential to increase earnings, even though…

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Could Jeff Bezos Turn to Bitcoin to Hide Fortune from Wife?

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Amazon’s Jeff Bezos has made numerous headlines recently due to his overly-publicized divorce, which shows all signs of being one of the most expensive ones — if not THE most expensive one — in modern history. According to estimates, it might cost him as much as $70 billion, which will make his soon-to-be-ex-wife the richest woman in human history.

However, as the process continues to unfold, many have started wondering if things may have ended up differently for Bezos if he turned to Bitcoin for help.

Bitcoin as a divorce tool?

In the last several years — since Bitcoin and other cryptos hit fame — many have started turning to BTC during their divorce proceedings. In fact, it can even be said that using the largest cryptocurrency in this way has become a new trend. The trend has been gaining so much strength that numerous law companies started including advice on what to do in regards to Bitcoin as part of their websites.

However, while the trend has been picking up in recent years, it is nowhere near as easy as it might seem. For example, if there is even a suspicion of a spouse having undisclosed holdings appears during the divorce process, it might be enough to impact the final decision of the judge. In other words, even if there is a complete lack of evidence, but…

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Three Biggest Things To Know Come Cryptocurrency Tax Season

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In recent years, digital cash systems known as cryptocurrencies such as Bitcoin and Litecoin have exploded into the public eye. A blend of cash and stocks, their use and value has grown exponentially. In 2017, the IRS decided to focus great effort on taxing them. In theory, this should be as simple as calculating taxes on any other type of property, bond, or other assets. Cryptocurrency, however, presents a unique challenge. The full extent of one person’s crypto activity can stretch across dozens of platforms and take a variety of different forms. This makes it difficult to gather all of this information cohesively, much less begin the seemingly- complicated process of reporting it.

These three tips should help anyone looking to legally report their crypto activity to figure out where to start.

Documentation is key!

There are dozens of different “exchanges” individuals can use to change their cash into crypto. When the flat currency is changed into cryptocurrency at the exchange, you establish your cost basis. This makes this data crucial when you begin the process of reporting.  Those who have used a variety of different exchanges should keep detailed records of everywhere that they made trades. Once tax season arrives, most exchanges will allow users to view their entire trading history with that exchange. This information will be necessary later to complete taxes.

Calculate your total gains

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