Michael Arrington, the renowned founder of TechCrunch and CrunchFund, recently stated his belief that Ripple’s democratization of $XRP trading is opposed by the Securities and Exchange Commission (SEC). Arrington discussed his thoughts on The Layah Heilpern Show, an entrepreneurship podcast, where he suggested that the SEC’s displeasure stems from Ripple’s decision to make XRP trading accessible to all, regardless of economic status.
Arrington speculated that the SEC’s legal actions against Ripple may have been motivated by a desire for a significant victory. However, he admitted that this was purely speculative. The SEC announced its action against Ripple Labs Inc. and two of its executives in December 2020, alleging they raised more than $1.3 billion through an unregistered digital asset securities offering.
Ripple CEO Brad Garlinghouse recently expressed optimism that the case would be resolved by the end of the year’s third quarter. On the other hand, Arrington believes that the SEC has a vested interest in ensuring Ripple’s demise as a significant achievement for the regulatory body. Despite his doubts about XRP’s future, Arrington is adamant that it should not be classified as a security because the distinction is meaningless to him.
The crux of Arrington’s argument is the ease with which assets can be traded. He emphasized that the issue’s core is whether assets are restricted to the wealthy or available to all. As a wealthy individual with a fund, Arrington could invest early in companies such as Uber, Airbnb, and Pinterest, while most others were not.
Arrington criticized the government for perpetuating this disparity, expressing disappointment that people cannot make sound financial decisions independently due to a lack of capital. As a result, individuals miss out on potentially large returns from successful ventures such as Uber, Pinterest, and Airbnb. He slammed the SEC’s patronizing stance, claiming that assuming lower-income people cannot make informed decisions is condescending and fundamentally unjust.
Arrington believes that regulation should focus on preventing fraudulent activities rather than limiting individuals’ financial autonomy based on their wealth. He believes every investor should be able to trade and invest in XRP and that financial decisions should not be based on one’s economic situation.
Arrington has previously questioned the SEC’s lawsuit against Ripple, explicitly questioning the Howey test’s relevance in the digital age. The Howey test determines whether a transaction is an investment contract by considering whether a person invests money in a joint enterprise and expects profits solely from the promoter’s or a third party’s efforts. According to Arrington, this test is obsolete and no longer relevant in today’s digital landscape.
Finally, Michael Arrington, a prominent figure in the technology and venture capital industries, has expressed his concerns about the SEC’s rejection of Ripple’s approach to democratizing XRP trading. He firmly believes in the accessibility of asset trading for all individuals, regardless of economic status, and argues against the SEC’s wealth-based restrictions on financial autonomy. Arrington’s criticisms highlight the importance of a regulatory focus on preventing fraud rather than restricting investor opportunities.
Source: https://bitcoinworld.co.in/techcrunch-founder-criticizes-sec-for-disfavoring-ripples-democratization-of-xrp-trading/