Latest / The Paul Barron Crypto Show / SEC Crypto Enforcement Quits! Ripple vs SEC Ending Soon?

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SEC Crypto Enforcement Quits! Ripple vs SEC Ending Soon? · The Paul Barron Crypto Show

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  Big news coming in from the SEC today and maybe the future of crypto is
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  now at hand. We'll break it all down for you guys. You don't
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  want to miss it. My name is Paul Barrel. We'll come back into
• 0:15
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  little discount. Try it out and see what you guys think. Let's get
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  into the topic for today, and that of course is in the SEC's enforcement
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  bulldog, which of course is mister David Hirsch. He has stepped down,
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  and David Hirsch's here was his post right here, as you can see,
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  Chief Crypto Asset and Cyber Unit in the Division of the Enforcement at the US
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  Securities in Exchange Commission. Last Friday was his last day. Nine years at
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  play, and that pretty much means he's been part of every project being targeted
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  at by the SEC pretty much. This is the individual that is in charge
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  of that. So he of course is stepping down for not really a explanation,
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  and there are things that will outline in a second, but the fact
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  that he's stepping down at this timing when we're starting to see what I think
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  will be regulation that will start to change kind of the course of crypto is
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  a pretty big deal. I want to go to a couple of clips here
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  because this is him in various positions around the industry. This first one was
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  him talking about Coinbase and Salona. Take a look. I'm the chief of
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  the Crypto Asset and Cyber Unit within the Division of Enforcement at the SEC.
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  It's a huge job. It's a very big team. First off, what
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  the hell are you doing? You're taking to task coinbase for buying and selling
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  trading those securities on their platform. What was really notable is that neither Bitcoin
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  nor Ethereum were on that list. Struck us as conspicuous in their absence.
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  I would not be so focused on what isn't on the list and think more
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  about what it is on the list and even other things that are on the
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  list. All we need to do to establish jurisdiction over Coinbas's conduct, in
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  our view, is to establish that they have been in the business of transacting
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  and at least one security. Why sue coinbase as opposed to suing the Solana
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  Foundation for issuing Solana in the first place. Base can't be selling a coin
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  that doesn't exist, So if the coin is unregistered, why not go after
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  the issuer. We retained the right and the jurisdiction to allege that Solona or
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  anybody else who we think are issuing unregistered securities violated Section five and doing so
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  there are suggesting that Solana is your next target. We don't use the word
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  target. That's a DOJ used, but DOJ word. But I'm not previewing
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  who else might be on our list of people to speak with. But it's
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  conceivable that filing enforcement cases against issuers is on your list of potential to dos.
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  It has been on our list, a remains on our list. So
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  as you can see, his assignments have been really kind of looking at regulating
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  by enforcement through a lot of what has been across the bow over the last
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  really nine years, and that includes the rebook case, what we've seen on
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  all the Wells notices, et cetera. And he does he is into somewhat
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  of a detail even if you think about the fact that they were maybe even
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  looking at Solana, even though now it looks like that won't be the case
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  if he is no longer there. But I'm wondering who will be the new
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  enforcement agent on the SEC side of it when it comes into these kind of
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  situations, especially around the digital asset side of things. Now he goes into
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  another clip in this same interview, this was about eight months ago, talking
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  a little bit more around things like loyalty points and are there are they actual
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  security? So take a look, why wouldn't I just create a token,
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  sell that without any oversight, hope for the best and reduce my costs Today
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  I think, well, that's interesting because there are a lot of tokens being
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  issued. Starbucks issuing tokens as part of its loyalty rewards, Nike is issuing
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  NFTs and selling them in the marketplace. You have a sixteen year old son
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  Ike who plays on plays roadblocks and he buys roeboxes. At what point is
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  the sec going to say Roebucks is a security, Nikes NFTs or securities Starbucks
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  loyalty rewards of securities? Is that the daisy chain that we're going to see
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  following next? I don't think that's a daisy change. Getting back to the
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  Howie test. So if Roebucks, for instance, the people who buy roebucks
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  primarily do so with the idea that if they just hold on to it'll be
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  worth more in the future because of all the great work Roebucks is doing to
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  make THEIRS a popular platform. Well, now that starts to look a lot
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  more like an investment and a security and less like a analogous payment system.
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  So some of this is judgment and viewpoint clearly, all right, So as
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  you see, this gets into a lot deeper discussion because this could apply to
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  almost any industry out there. They were referencing roadblocks, but they failed to
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  reference the utility side of thing. But you could look at this on pretty
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  much anything, any kind of collectible, any kind of fashion item, possibly
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  luxury items, pretty much thing in the world that potentially has the ability to
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  go up in value as a security. And I think that's the argument that
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  many people are going to make, especially around the loyalty framework, because in
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  most cases, loyalty usually means perks or membership. It's often not a scenario
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  where they're reselling those Now, I get it, with what Nike's doing and
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  what Odyssey was doing with Starbucks, maybe that was one of the reasons that
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  Starbucks reset their situation. Then you have the scenario playing out with McDonald's right
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  now, with what they've been able to do, which is really kind of
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  keeping it within their own coffers, So not necessarily a situation. However,
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  I do think this is going to play out, especially as we see digital
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  assets going into the future through real legislation, which will of course take that
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  power away from the sec. I want to go to another clip real quick
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  within this, because he also defended a little bit more around Gensler and their
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  entirety of the Depbox case. Listening last week on CNBC, the chairman made
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  the file statement, he said, we don't need more digital currency. I
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  equate that to the Chair of the FAA saying we don't need any more airlines.
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  Why would the chair of the SEC be in a position to determine what
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  the marketplace needs first? I would, I think take mild issue with the
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  idea that we don't always take action based on the letter of the law.
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  That's just not a conversation I've ever heard. I would be appalled if that
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  happened. That's not the way we approach our jobs. As to what the
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  chair said, like, I would not tell anybody don't create a new digital
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  product. It's not my place to say. So you're walking back the chairman's
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  comments. I'm not walking back the chair all right. So it was kind
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  of defending Gensler to a certain extent. But remember there was a lot of
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  mishandling of the deb Box case, the SEC obviously shuttering their office behind the
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  failed Debox case in the crypto lawsuit, and there was many things that played
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  out within that that was clearly in the wrong from the SEC side of things.
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  At the end, what we're dealing with now is hirsh Is gone.
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  Whether or not we get someone to that level of tenacity in the SEC or
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  not still unknown, or do we get enough regulatory alignment that it starts to
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  move things maybe more into the CFTC, which is a whole nother you know,
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  consideration as a whole, but a lot will change, I think as
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  we start to see these regulatory things line up. Remember this was also going
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  into the market somewhat as a meme. This was a good example of the
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  beginning of it. Former SEC official David hirsch Choice pumped off Fund this is
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  a joke for those of you watching right now as trading director, this was
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  a joke they put it out. Obviously, the meme went crazy. Pump
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  even started going in and you can see some of the tokens that started to
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  move in within it. So there was all kinds of scenarios that played out
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  within this, and of course right there pumped off On also taking it a
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  little further. We're excited to announce the new trading head is David Hurst.
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  Maybe it is a real David Hurst, just not this one. I'm not
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  sure. But the point behind this is these kinds of meme scenarios play out
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  all the time within the markets. Hirsh, of course responded on his LinkedIn
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  account when one of his colleagues said, hey, you might want to check
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  this story running out there, and he of course denied it, and that
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  was pretty much the case. He went in and said right here. Hey.
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  When asked to comment on this, he said, this is false.
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  I have not yet announced my next role, but it's not going to be
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  with this or any meme coin platform. Now does he mean meme coin platform,
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  but not necessarily it could be a crypto project. Interesting statements. Why
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  would he have not used the term just any crypto project? Because meme coins
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  are a crypto projects. So just an interesting choice of words right there.
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  All right, So this next week gets into maybe this is the real reason
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  why he said, Hey, my job is done and I'm just gonna go
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  ahead and leave, because this might look as though it is a loss.
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  The SEC submits the settlement offered a ripple, only a one hundred and three
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  million dollar penalty. If we're talking about one hundred million dollar penalty as opposed
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  to billions, it pretty much changes the format of how many of these kinds
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  of cases would be looked at in the future, and that being the case,
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  it also appears that it could be maybe another loss for the SEC in
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  terms of was this really a good use of the agency's time. But if
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  that does prove to be the case, we will know here fairly shortly.
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  Of course, XRP is pumping a little bit up on the news around this.
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  But if you look at how much Ripple spent on the defense of this
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  case, two hundred million right here in fighting the SEC lawsuit. Now two
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  hundred million, that's a lot, you know, obviously not for a size
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  of a company like Ripple, but if you think about the amount of action
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  it would have taken to lodge that case from the SEC. I mean it's
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  probably two maybe three x of that. So we could be in the range
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  of four hundred to six hundred million million dollars in taxpayer funds that were designed
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  to basically go through Ripple, you know, offshore a lot of innovation and
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  get one hundred million dollar fine at the end of the day. So a
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  lot of interesting things pouring into this other things to look at right here,
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  Maybe the agency is getting a little bit more framed up for tokenization, as
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  it may provide you know, a lot more into global markets. This is
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  Mark you Ada, one of the commissioners over there, which we've reported on
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  before, and statements that is that tokenization, Uh, definitely in the conversation
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  as assets and securities, holdings into digital tokens can benefit capital markets right there
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  in that argument. So if this being the case, and this is something
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  that we've talked about before, is that if you look at the framework of
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  what we're going to see in terms of smart contracts, what we'll see within
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  the ETH ecosystem and digital securities, the likelihood is that Salona maybe comes to
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  retail chain. You've got the opportunity here of ETH becoming kind of this tokenization
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  side of things, and then Bitcoin becoming maybe a reserve for many currencies within
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  the globe. So a lot of opportunity here, I think from the SEC
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  to play in a different world here, just as a reminder in June again,
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  timing wise, all of this could be playing into something very interesting and
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  that is the end of June right here. June thirtieth, the entry into
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  Application for MICA, which is Markets and Crypto Assets regulation in the EU.
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  This pretty much puts everything in play in the EU for crypto including stable coins.
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  Remember XRP is launching their stable coin at the end of the month in
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  alignment with the EU's ruling, and where we'll see that going. So if
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  you look at the markets right now and just look at where XRP is one
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  of the only tokens right now that has had an interesting pump here on this
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  last twenty four where it's up to around fifty one cents, where most of
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  our market right now is in the red. So just interesting scenarios playing out
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  in all of this stemming from what most likely will be a political landscape going
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  forward. Lots to talk about on that. We'll be doing more coverage on
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  that this week. To make sure and stick around. If you're not in
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  the diamond circle, make sure and get in right now. It's a great
• 13:13
  place to get additional content and additional news. And of course all you have
• 13:18
  to do is use the link down below to find us there, and of
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  course follow me out there on x at Paul Baron. We'll catch you next
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  time right here on tech Bath