Gene Hoffman, COO of blockchain company Chia Network, has predicted that the US Securities and Exchange Commission will defeat Ripple in a closely watched legal battle that will soon enter its third year.
“The only possible outcome is for a federal judge to rule that Ripple’s sales of XRP made XRP a security” he said. tweeted.
The only outcome is that a federal judge will rule that Ripple’s sales of XRP made XRP a security.
– Gene Hoffman hoffmang.xch 🌱 (@hoffmang) December 7, 2022
The former CEO of a public company says federal judges are skeptical enough to know that most people bought XRP hoping that “the number would go up“. Therefore, the arguments of Ripple and its supporters regarding the alleged usefulness of the crypto-currency will probably not hold up.
Gene Hoffman, who has decades of experience working with the SEC, pointed to the fact that the regulator hasn’t lost a Section 5 case in decades, adding that there is very little difference between XRP and LBRY Credits (LBC) tokens. Peer-to-peer content distribution network LBRY was defeated by the SEC in November, with the court ruling that the startup was offering LBC tokens as unregistered securities.
In addition, Ripple executives were informed by none other than Bill Hinman, the former director of the SEC’s Division of Corporation Finance, that its XRP distributions were considered illegal in 2019.
Did you know that Bill Hinman told Ripple leadership that XRP was a security in his opinion in 2019? Neither did I… Prepare for the post Ripple SEC loss future https://t.co/MmD79MRL5l pic.twitter.com/yykUsTVSfY
– Gene Hoffman hoffmang.xch 🌱 (@hoffmang) December 5, 2022
While Gene Hoffman acknowledges that the SEC’s handling of Hinman’s 2018 Ethereum speech was “a mess“, he is convinced that this has no bearing on the case.
The tech entrepreneur also criticized Ripple for misleading many in the crypto-currency community about the true state of affairs. “It’s a shame that so many people at Ripple have misled so many people on this issue“, he wrote.
Hoffman argues that “very few“of the top 100 cryptocurrencies are not securities in the United States.
The SEC’s lawsuit against Ripple was filed about two years ago. The popular blockchain company was accused of offering XRP tokens as unregistered securities. Ripple CEO Brad Garlinghouse expects the lawsuit to be resolved. in the first half of 2023.