Attorney Hogan is Back! The SEC Seeks Global Authority. Ripple _ XRP v. SEC Update. Special Guest!.

Hello and welcome to the channel formerly known as Legal Briefs. This is Jeremy Hogan and I'm excited to announce that we will be rebranding the channel starting today. As the Ripple versus SEC case has become a touch quiet this last month, I began to really study technical crypto trading. And I've been watching the chart guys, blockchain backer, all those guys, and I had to be honest with myself. I am a natural at technical trading. I'm really good. And let's begin with the daily chart for XRP. Now what you can see right away on this chart is the Fibonacci. Now you might not know that the Fibonacci ratio is found in nature and there is nothing more natural than having a bad day. And look at that dip right there back in 2017. That is normal, but it comes right back to a cup and handle formation about three years later. It's having a drink, maybe some aged scotch, and that is a good after a bad day. Oh my God. It's the Einstein of technical trading. The man, the myth, the beard, blockchain backer. Jeremy, I'm really proud of you, man. You could do this, but you know, you got to look at that rally on your chart. You know, the one we're looking at back there in September, what does that tell you? I mean, doesn't that mean that guys like me just kind of promote in the XRP? No, we all know that's the rally prior to the capitulation back in 2018 that led to the bottom of the Bitcoin bear market, leading us into a new bull run that took us to the 4.236 extension. Of course, we're going to have to look to see that there is going to be some type of breakout into the new all time high with the double tap on top of the all time high with the bull flag breakout backtest V bottom from that bull flag. As long as we consolidate at the top, we do five waves to the upside, five Elliott waves and boom, we're on the moon. Is that just English? Maybe you should just stick with the legal stuff. Welcome back to legal briefs. And thank you, blockchain backer for setting me straight and probably saving new people a lot of money. Also, every time I say Fibonacci, I start to crave pizza. So that'd be really bad for my diet. In any case, I have been off the YouTubes for a couple weeks now. And today we are going to talk about the ripple versus SEC case and the latest order. What is going on behind the scenes in the case these last couple weeks and the state of the United States SEC crypto enforcement, which I characterize as an attempt at global domination. If you think the SEC think you over in England, you, my friend in Singapore are outside of the SEC jurisdiction. I've got news for you. So let's start general and scary and we'll zoom in on the As you may know, United States SEC chair Gensler is a little over nine months into the job and he's getting his legs under him. The former Goldman Sachs banker guy has set his sights straight on two crypto things, stable coins and decentralized finance, stable coins and decentralized loans. I wonder what industry he's trying to protect. In any case, apparently word has come down from above that the crypto defy projects are in the crosshairs and not only in the United States, but worldwide. Yes, the SEC is going global. So listen to this story and how crazy things are getting. Now, just to give you a heads up, this story ends with a lawsuit against the SEC, but we'll get to that. Now, this story starts with Terraform Labs and Terraform is a Singapore company and developed Terra, which is a decentralized and open source blockchain and also runs a defy application on the chain, which gets it into our story. Now, you might know it because it runs on the or with the Luna token. And this is a Singapore company and it was founded by Mr. Kwon, who is a Korean national. That's a picture of Mr. Do Kwon. He kind of looks like J-Hope from BTS, no? So anyways, earlier this year, SEC lawyers emailed Mr. Kwon because they believed that Terraform's defy platform was violating U.S. securities laws, as U.S. citizens are allowed on the Terra platform. So what did Mr. Kwon do? Did he say, screw you Americans, you don't have any power over me, babo. No, he said, OK, I will talk to you. And he arranged and spoke with the SEC lawyers for about five hours in July of this year, voluntarily. The SEC then followed up that talk with a demand for Terraform documents in response to which Terraform's lawyers objected to providing the documents and entered into negotiations with the SEC lawyers over what documents it would provide, voluntarily provide. Now, to fast forward a little, I will tell you that Terraform and Mr. Kwon eventually sued the SEC over this, but for why, I will read from the lawsuit. Now, here's what the SEC allegedly did and where things get crazy. Quote, attorney one, that's the SEC attorney, advised Terraform's lawyers that he would discuss the matter about the voluntary production of documents with his colleagues and get back to Terraform's lawyers. Unbeknownst to Terraform's lawyers, Terraform and Mr. Kwon, the SEC lawyer had earlier that morning signed subpoenas for Terraform and Mr. Kwon, who was visiting the United States. The subpoenas were served on Mr. Kwon in public. Mr. Kwon was approached by the process server as he exited an escalator at the main net summit while on his way to make a scheduled presentation. Close quote. Now, I think he was in New York for a presentation or a summit, a talk when he was served. So in short, what we have here is a foreign national of a foreign country who voluntarily complied with the request from the SEC, who was then served subpoenas by the SEC while he was visiting the States. All the while, his attorney was in discussions with the SEC that very day about what documents they would or could provide the SEC voluntarily. But that's not even the worst part. Let's go back to the lawsuit. Quote, the SEC's service of the subpoena violated the SEC's own rules and the subpoenas were intended to impermissibly secure personal jurisdiction over Mr. Kwon and Terraform in a way that was not legally available to the SEC. SEC rule 150B provides that whenever service is required to be made upon a person represented by counsel, service shall be made upon counsel. And then at the end, my favorite quote, the SEC is of course required to follow its own regulations. And there you have it, ladies and gentlemen, your United States SEC is jumping out and serving subpoenas on foreign nationals of foreign companies getting off elevators at their New York hotel for violation of American laws and in violation of its own rules. I wonder how the SEC would feel about Chair Gensler being served a lawsuit in Turkey for violating Turkish law while on vacation in Istanbul. But this is the truth and the difficulty in the age of the internet. And now with decentralized finance, what's the power hungry government organizations do other than stretch its reach out globally? Well, the one thing to do is couch your power grab in a nice and reasonable language. And that seems to have been SEC Commissioner Crenshaw's approach when she released her article on the issue called quote, take on DeFi last week. Now, you might not agree with Michael Saylor on many things, but I think he got it right when he summarized the article as follows, quote, no existing DeFi platforms are deemed compliant at this time and regulation is coming, close quote. Of course, he pumps Bitcoin also, but his underlying analysis is correct. DeFi is in the crosshairs. Take a look at how nice Commissioner Crenshaw makes it all sound. She makes it sound also sweet. At the very end of her article, she concludes, quote, my staff and I have been actively engaged in helpful discussion with DeFi experts and my door remains open. I can't promise an easy or quick process, unfortunately, but I can assure you of good faith consideration and a true desire to promote responsible innovation, close quote. And of course, the only problem with that statement is that DeFi is illegal and will always be illegal to the SEC. It's kind of like the DEA asking heroin importers to come on in and talk to them about their drug importation business. It's never going to go well. But that analogy is not true, Commissioner Crenshaw would say. We can and have worked things out nicely with DeFi platforms in the past. And in her article, she even highlights a success case. Quote, our division of enforcement considers cooperation when determining what remedies to recommend for violative conduct. And we have agreed to settle multiple cases with reduced or no penalties in response to self-reporting violations, including in the digital asset space. See, for example, in the matter of Gladius or Gladius Networks from 2019, close quote. And yes, apparently Gladius Networks did self-report their ICO to the SEC. They did the right thing for the SEC. They had a very interesting token. It was the GLA token, which was to be used to solve a real problem involving denial of service attacks and servers. And they entered into a consent judgment with the SEC, which, among other things, stated, looking at the consent judgment, quote, subsequently respond at will within 90 days of the date of this order, file a Form 10 to register under Section 12G of the Securities Exchange Act of 1934. The company also had to set up protocols to refund funds to the GLA token purchasers and about 10 other things. And how did that work out for them? Looking at a Cointelegraph article from a couple months later, quote, distributed cybersecurity startup Gladius dissolved without complying with the United States Securities and Exchange Commission SEC to reimburse investors. The firm's co-founder and chief technology officer, Alex Godwin, announced the dissolution of the company in a message sent to the project's official Telegram group on November 22 by stating, quote, the company no longer has funds to continue, close quote. Yep, that's it. The company went out of business. The purchasers of the token received nothing. And the GLA token is now worth exactly zero. And this is Commissioner Crenshaw's success story for when DeFi comes in to talk with them. Now, if that's the best case scenario, what happens in a not best case scenario? And it's ironic that this GLA token is highlighted as a best case scenario by an SEC commissioner. But I think it really highlights the problem with applying U.S. securities laws to decentralized projects. It just can't work because it's like a company selling shares of stock, but then using the money to build railroad tracks that anyone can use. It's just a square law and a round business model. I seriously want to do a presentation for Congress with just this picture. But that congressional presentation will have to wait for now because it's time to zoom on down into the Ripple versus SEC case because there was an important order recently. And also, we need to answer the question, why has the case been so quiet recently? And, you know, I've been calling the case the Ripple versus SEC case instead of the SEC versus Ripple case because Ripple has really got the SEC on its back heels. And recently, Attorney John Deaton was interviewed by Paul Barron. And here's how Paul started his introduction of the case. All right, today, we're going to dive into XRP and the legal case against the SEC. But more importantly, it's going to be about you, the XRP holders. I smiled when he said the legal case against the SEC because my secret ops mission had succeeded. But seriously, watch that interview. John has become really good at that stuff and really lays it out in that interview very well. But in any case, there was an order in the Ripple versus SEC case recently, and it was an important one. And I covered this motion that led to the order back in my October 9 video. So that was just about over a month ago. And here is the basics of the motion. All right, so this is the motion to watch out for. And here is what the SEC wants. Quote, the SEC requests an order compelling defendant Ripple Labs to conduct a reasonable search of relevant video and audio recordings of internal Ripple meetings. Close quote. So that is what the SEC wants. And in that video, I went into some detail and did an analysis of the motion and the legal arguments. And I concluded as follows. And because so much in discovery disputes is left to the judge's discretion, it's difficult to guess what the judge will do. My instinct is that she's going to want to allow the SEC to be able to dig a little bit further into Ripple's sandbox. And that feeling just comes from her prior rulings in this case. The problem the judge is going to run to is time. She's running out of time to scope really broad orders as a hard discovery cutoff is coming in a month in early November. Now, that might lead to a denial of the SEC's motion. But my best guess would be a limited granting of the motion that would allow the SEC to get more recordings, but in a limited way. And it kind of sucks to be right all the time. But yet, here I am. Because the one hope I had for a denial of the motion went away when the court granted the extension of the discovery cutoff. And that left only my prediction that the judge would grant further limited access to those videos. And here is that order from the judge as transcribed by attorney James Filon on Twitter. Judge Netburn granted the SEC's motion to compel Ripple to search for and turn over video and audio recordings of internal Ripple meetings. But the order had limitations as described below. Judge Netburn ruled as follows, quote, Ripple is ordered to conduct a reasonable search of the relevant video and audio taped recordings and produce responsive documents because Ripple represents that it has more than 4,000 recordings. The parties are ordered to meet and confer to determine whether there are particular time periods when recordings are most likely to be responsive to the SEC's discovery demands. In light of the close of discovery, Ripple is ordered to undertake such efforts without delay, close quote. And that was it. So in short, the SEC is going to be getting more of those recordings of meetings. And what they are looking for is discussions by Ripple at these meetings where they talk about XRP more like as a share of stock and not a digital token. And when will we know what the SEC will find in these videos, if anything? The first glance we're going to get at this evidence is likely going to be when the parties file for summary judgment. And that won't be until early next year. Be patient. We're almost there. I'm such a nerd. I don't know if I'm looking more forward to summary judgment motions or more forward to Avatar 2 next year. And finally, what is going on in the Ripple versus SEC case right now? Why haven't we been seeing the normal flurry of motions and such this last two to three weeks? And I'll tell you why. It's because both parties are conducting expert depositions. Now there are two kinds of witnesses in a case, fact witnesses and expert witnesses. An expert witness is someone who brings a special knowledge or expertise. And that is the person that is allowed to do something very special in court. And that is give an opinion. If I was in the witness box and the SEC asked me if I thought the XRP ledger was decentralized or not, and I tried to give my opinion, there would be an objection. And the judge would tell me that my opinion is irrelevant and I would not be allowed to answer. Now only someone with training in decentralized ledgers can give that opinion. I would be allowed to give an opinion on, I don't know, how to make snarky YouTube videos maybe. In any case, I am certain that each side in this case have listed numerous experts. And these experts will be explaining all of the technical aspects of the case to the judge. And you can expect each deposition of each expert to last all day. And each expert must prepare a report of his or her opinion. And I wouldn't be surprised if there are 10 to 15 experts in total in this case. So when you add it all together, that's a lot of work going on right now in the case behind the scenes. And what else is going on? To answer that, you need only follow super lawyer and the nicest person ever, Jim Filan on Twitter at Filan Law. He has put together an awesome compilation of due dates on the case. And here it is. As you can see, on December 6th, there are a lot of things due. The SEC has to most importantly identify any terms in the 1500 XRP sales contracts, which created an investment contract between it and XRP buyers. That should be interesting. Also, the SEC has to respond to about a thousand requests for admissions from Ripple. And then on page two of his summary, you can see that January 14, 2022 is the deadline for expert discovery. And that is really the cutoff of all discovery in this case. And I would expect that all the discovery like Ripple providing relevant videos and the SEC providing documents regarding SEC employee crypto trading, all of that kind of stuff must be done by then. And that is our hard cutoff. And then unless there is a surprise, I expect the judge in January and February to rule on the big motions, the motion by Garlinghouse and Larson to dismiss the lawsuits against them, the motion to strike the fair notice defense, et cetera. But if there's surprise and we get a ruling on those sooner, I will be right here to report them for you. Except next weekend, I will be at the Orlando v. Nashville playoff soccer game. And I promise on that day, I will not be worried one bit about the SEC and its quest for global domination of our purses and wallets. Have a great day. XRP, Orlando City Soccer, Orlando City Soccer, Orlando City Soccer, Orlando City Soccer, XRP. Am I getting too two-dimensional?