Posted on Jun 09, 2022Read on

SEC vs Ripple: The Best Possible Outcome

The judge will order a mandatory buy back program and the burning of the tokens given to investors, founders and employees. @luismcsoul



Two systems with limited supply tokens:

One to mint coins every time there’s a transaction. Logically the first minter now is a multimillionaire.

The other one is a platform with already minted coins that are sold every time there’s a transaction. Logically the minter gave himself a lot of tokens and now is a multimillionaire.

In both cases, if, what they have created is useful and beneficial to the society, there would be demand for it until copycats and other further technological developments turn their systems obsolete.

Should we penalize or prosecute them? Or let the market decide their futures?



The case of the Securities and Exchange Commission against Ripple will determine the viability of offering tokens to investors as part of the funding strategy of a company.



1. The XRP network is a useful technology to transact internationally at a low cost to its users.

The business model is clear: charging a fee for the transaction with an intermediary token fluctuating on an open market.

(The SEC will not get one single penny from Ripple.)

2. Considering that the price appreciation of the cryptocurrency was sold to investors as an asset with all the characteristics of a security, in consequence Ripple must:

a. Burn all the XRP tokens held by its founders and Ripple ‘s current and former employees.

b. Buy back (usually at a premium) all the XRP tokens (balances that investors haven’t sold yet) from those who participated in the private selling schemes (1):

…………... Angel Round $1.40M May 2013

…………… Seed Round $3.50M Nov 2013

…………… Series A $32.00M May 2015

…………… Series B $55.00M Sep 2016

(Note that the Series C was already bought back by Ripple).

c. Compensate mentioned investors with further equity (in case Ripple runs out of cash).

d. In order to avoid price depreciation and affecting retail investors: These XRPs can’t be sold in any kind of market, over the counter or any other spot trading platform and must be burned, effectively reducing the total supply of XRP.

e. Towards the future, the company wouldn’t be able to give XRPs as payment or compensation to any of its employees or other institutions.

3. Once in compliance with the mentioned steps, the XRP token would be allowed to reenter US marketplaces.”


Then everyone broke but happy would have clarity to operate the company (and other crypto companies alike), private or public, towards a bright crypto future ahead.



.”Directing creative teams towards multiverses”.

(1)= information taken from Messari, XRP Initial token distribution: