A million-dollar question in crypto might be whether tokens can be considered securities in the United States, with some crypto companies staking a lot of money on it.
For payment platform Ripple — sued by the U.S. Securities Exchange Commission (SEC) in 2020 — defense costs have already topped $200 million, Cointelegraph has learned. The SEC claims Ripple sold XRP (XRP) tokens as an unregistered security in the same way it has recently accused many other crypto companies.
Even the possibility of expensive litigation with the regulator isn’t stopping firms and projects from testing the limits of what can be considered a security. The Arbitrum Foundation — the entity behind the Arbitrum blockchain — plans to reward Ether (ETH) tokens worth over $6 million to holders of its native Arbitrum (ARB) token, according to a recent proposal in its DAO governance forum.
The tokens were generated through base fees and surplus revenue from network transactions. Although the proposal has gained support, some community members voiced concerns about the revenue distribution serving as a way to label ARB tokens as securities.
This week’s Crypto Biz explores Arbitrum’s latest controversial proposal, Ripple’s two-year battle with the SEC and a large corporations’ coalition to build blockchain solutions tailored for institutional investors.
Defending against SEC to cost Ripple $200 million, CEO Brad Garlinghouse says
A case brought against Ripple by the SEC has cost the company $200 million, said its CEO Brad Garlinghouse during a fireside chat at the Dubai Fintech Summit. Garlinghouse also said the U.S. is stuck compared with the regulatory progress in the United Arab Emirates and the recent Markets in Crypto-Assets bill in the European Union. The SEC sued the crypto payment platform in December 2020, claiming Ripple illegally sold XRP tokens as an unregistered security.
Microsoft, Goldman Sachs, others partner in new blockchain network
A new blockchain network for financial institutions is in the works from a conglomerate of participants in the finance and tech space, including Microsoft and Goldman Sachs. The Canton Network will be an interoperable blockchain network for companies working with institutional assets. The platform is built on Daml, the smart contract language of Digital Asset, which creates an interoperable system where “assets, data, and cash” can synchronize…
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