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Hello this is Matt on the moon family Said Dan's channel the xrp community has Been warning about this for over two Years at this point warning of SEC Overreach warning of SEC regulation by Enforcement and Attorney John Deaton's Prediction of the SEC suing at least one Major cryptocurrency exchange certainly Has come true and technically it did Last year because of the whole FTX uh Fraud Ponzi scheme that came up but um And fair enough also creditors do but Um attorney Deaton was really more so Talking about for uh Exchanges being sued not for fraudulent Activity he was making his prediction Based on this idea that exchanges were Under the microscope of the SEC and that The SEC would engage in extreme Overreach well now his prediction that Prediction has come to pass last night News broke that the SEC has sued Gemini That's the win Winklevoss cryptocurrency Exchange as well as Genesis which is the Insolvent firm that is under a Barry Silbert's digital currency group and There are a lot of things to say about This and people are still unpacking What's going on since the news just Broke last night but I will tell you That there is definite fear that this Could put Gemini and Genesis out of Business and if that happens Crypto contagion spread so you'd have
Here in that in that scenario if these Firms aren't allowed are able to if they Financially can't survive because They're already in this this pit of Despair where they got this massive hole In the balance sheet you know so there's Already that that's already a big Problem and then if they get hammered With additional fees and this and that And onerous regulation if they go out of Business what do you think is going to Happen to uh the rest of the crypto Asset class do you think the contagion Will or won't spread so here's the SEC Uh you know allegedly protecting Investors but are they really who's Going to be protected by whatever the Hell they're trying to do here They could make things frankly much much Worse I've got comments to share from Three attorneys within the xrp community Attorney Jeremy Hogan Attorney John Deaton and Attorney Fred rispoli and an Additional attorney who is not within The xrp community who actually thinks That the SEC is in the right and he's Not a Troll he's he's spoken about the Secv Ripple case attorney Deaton's Talked to the guy and shared some stuff That he said it's just in this Particular case are we talking about Underlying crypto currencies being Securities or are we not uh we're gonna Break that all down but before going
Further I do and be clear I do not have A legal or financial background of any Kind I'm not offering legal or financial Advice and you definitely should not buy Or sell anything because of anything I Say right I'm just an Enthusiast who Enjoys making YouTube videos about Crypto related topics but just as a Hobby and just for fun okay I'm going to Very quickly set the table all you Really need to know before getting into The rest of this content is that Gemini Is a cryptocurrency exchange owned by The Winklevoss Twins and Um actually I want to mention this too And I don't want to belabor this this Point but it's absolutely totally fair To bring this up the Winklevoss twins During the secv Ripple suit notably Silent there was no rallying of the Crypto Community around the attack that Was going on you know finally gets Ripple certainly but xrp holders as well There was no rallying cry from the Winklevoss twins they didn't give a damn They didn't file an amicus brief and now It's hitting them well isn't that Something wouldn't have been better for The last two plus years to have just had You know fought towards having a Cohesive move against the SEC you know Moving together because that's not what They were pushing for but that's what we Should be pushing for so yes I'm calling
That out but uh I'm not going to belabor The point I I just wanted to note it and To highlight that that's the wrong way To approach this we all need to come Together and push back against the SEC In particular even if even and by the Way there is a chance that um because Like I'm willing to be persuaded here if The way in which the program Gemini's Program was packaged can be be found to Legally fit the definition of an Investment contract that's one thing I Have a problem more so if they're Attacking crypto assets and there is Something in here to that effect so um What you need to know is that Jim and I Had what they call their earn program Where you could hand over the keys to Your cryptocurrency and then Jim and I Would hand over your cryptocurrency to Other firms uh to seek um you know Earnings on that because they'd loan it Out too and you don't necessarily know To who to who is my understanding anyway I don't know what breeders transparency But setting that aside point being it Was a ton or if not all but maybe it was All of it actually if memory service Going out to Genesis which is against Part of Barry Silver's digital currency Group and FTX was intertwined with all This and you know that FTX is not right Ponzi and fraud at this point and so It's now just gone and there's a giant
Black hole in the balance sheet and and Gemini as a result back in November Halted withdrawals because they didn't Have a choice because Genesis couldn't Give Gemini customers the their own Assets back So you had Gary Gensler tweet out the following in The evening last just last night we SEC Charged Genesis and Gemini for the Unregistered offer and sale of crypto Asset Securities through Gemini earn Crypto intermediaries need to comply With our Securities laws this protects Investors it promotes trust in markets It's not optional it's the law okay Kim Jong-genser well um there's a lot of Critiques though here is what Um representative Tom emmer had to say In regards this and by the way Tom emmer Has publicly stated that xrp is not a Security he was literally stating that Before the SEC even sued Ripple so Here's what Tom emmer had to say he Retweeted that message from Gary ginzer And said Gary ginzer is once again late To the game protecting no one Quite clear that his political Regulation through enforcement strategy Hurts everyday Americans Gary ginsler When can we expect proactive guidance Instead of leaving the industry to Interpret the rules of the road through Your after the fact enforcement actions
Good question because look again though Like I've been saying this forever Gary Gensler's goal here is to do good things For Gary ginsler it is not to protect The everyday investor as evidenced by The way that he's approaching everything He's doing suing Kim Kardashian dashing For the uh you know the It's like you get the the media hits That he wanted You know what about everything where he Literally was meeting with Sam Bang Actual Ponzi scheme fraud right under His nose couldn't sniff that one out but He protected us from a Kim Kardashian Tweet The This this is this has been par for the Course with Gary Gensler now you have Fox Business journalist Eleanor turret Who tweeted out the following While lending products have more Features of a traditional security There's still no case law that defines What exactly a digital asset or product Is security commodity Etc underscoring Yet again the significance of the Ripple Lawsuit yeah and so you'll she's right You'll see in a second as we go through This that the the SEC they are Explicitly calling out Uh cryptocurrencies in this And that's it and the good news is at Least to this point it's not the thrust
Of their argument but it is in there and As things go forward they can amend the Initial lawsuit to say whatever the hell They want they can attack individual Cryptocurrencies and they may Uh so here's what Tyler Winklevoss had To say about this and then I'm going to Get into what attorneys within our Community had to say about this Tyler Winklevoss wrote The Following on Twitter It's disappointing that the SEC chose to File an action today as Gemini and other Creditors are working hard together to Recover funds this action does nothing To further our efforts and help earn Users get their assets back their Behavior is totally counterproductive as A matter of background the earn program Was regulated by the nydfs and this is The Twitter account and it stands for I Didn't Commit This to Memory so let me Just pull up the logo here A New York State Department of Financial Services That's what you decided so Nydfs is what's regulated and then he Says and we've been in discussions with The SEC about the earn program for more Than 17 months folks let me just pause Here to ask does that remind you of Anything about the secv Ripple case how Ripple was able to operate In broad daylight SEC knew what was Going on for a better part of a decade
Before getting sued does that Does that concept I know the timeline's Not exactly same that doesn't matter Does that sound yeah kind of like a Little bit familiar And in this case wow talk about Retroactively going after him though but Anyway Tyler WinCo says they never Raised the prospect of any enforcement Action until after Genesis paused Withdrawals on November 16th yeah so What they're saying there's had Sam Bankman freed and his Ponzi not Collapsed when it did uh Gemini and Genesis would not be getting sued right Now Tyler continues Despite these ongoing conversations the SEC chose to announce their lawsuit to The Press before notifying us Super lame It's unfortunate that they're optimizing For political points instead of helping Us Advance the cause of 340 000 earned Users and other creditors yeah exactly Folks and I'm telling you if this goes Really bad for them then the contagion Is definitely spreading if if these Firms fall apart in Genesis is much more Consequential than Gemini Gemini that'd Be bad enough I don't want I don't want Them to cease to exist and fall apart And go away uh sure as hell no but if This happens with Genesis there's no
Other firm quite positioned in the way That Genesis is fulfilling the role that They were especially on the Institutional side of things if they're Gone And we were still we were already Waiting for that other shoe to drop Where they're like uh yeah we're closing Our doors which is always a possibility Because they are insolvent at this point I don't know how you're going to be able To fix that the Winklevoss twins seem to Think that there's a path forward Potentially but now if there's gonna be Additional penalties and this or that You're just making it that much more Likely that everyday people who had Exposure to these these uh these firms End up getting harmed substantially more That's what the SEC is doing is making It more likely that additional people Will be harmed Tyler wink of Austin says we look Forward to defending ourselves against This manufactured parking ticket and I Like that way and we will make sure this Doesn't distract us from the important Recovery work we are doing but seriously What is the point or urgency here the Urn program has been shut down for Almost two months for the avoidance of Doubt Gemini has always worked hard to Comply with all relevant laws and Regulations any suggestion to the
Contrary is unsupported by the facts and And so and that's what he had to say Then you had a little note about Bitcoin Hit in 19k as far as the regulation Being under nydfs I did want to say too That made me think about how the SEC is Insisting that uh Ripple what they're Conducting business and as it pertains Xrp and all that jazz that's under the Purview of the SEC they assert despite The fact that and I believe it was in 2015 there was that fencing ruling and So Ripple arguing that part sounded Familiar too uh no we're you know we're Already fully regulated you know under The defense in ruling 2015 uh But now also under the SEC so another Similarity Um and then there was this from attorney Jeremy Hogue and he said I read the Lawsuit against Gemini slash Genesis Briefly and I didn't see any argument That the digital assets themselves are Securities only that notes were utilized And so were subject to SEC registration This is not the crypto exchange lawsuit I expected hmm Um although they're okay so he's right That they're there weren't um explicit They weren't explicitly named Cryptocurrencies that were you know Infringing or violating or anything like That like you saw in the The Wacky case You may recall where there's that
Insider trading allegation and then Ensuing the individuals there they also Cited I believe it was nine Cryptocurrencies that are themselves Securities well we didn't see something Like that here but we did see something So the thing with me we're about to get To it here uh here was Attorney Fred Raspoli's initial reaction after reading This member of the xrp community Frederispoli said interesting I caution I only spent five minutes Looking at it but SEC complaint against Gemini and Genesis alleged Securities Violations over the Genesis earn Agreements and does not allege any Cryptos themselves are securities and Then a Community member responded to him And said Fred It seems to me they are specifically Targeting anything that seems to provide Interest for lack of a better word they Went after coinbase about the same thing Is this the protection of Legacy systems Or is there a strong legal base for Eight for Passive returns equals Security And a small note you may recall what He's talking about here is coinbase Wondered often with their where they Were calling their Linda program and They ran it by the SEC the program and The SEC said if you launch this we will Sue you
And uh when was that was that I can't Remember when that all happened Everything's blurred together was that This past summer or a year ago I can't Even remember at this point but I Remember when that happened I'm just Sitting there thinking Well because and by the way that point Too I'm sitting here thinking coinbase And ultimately thankfully coinbase did File at Amicus brief but at that point I Don't believe that they had and because Nobody was participating and then Finally it's like coinbase realized Maybe we should all work together maybe That's a good idea and I do think that As a you know a general crypto Community We should be pushing back against Nonsense from the SEC Um and if there is a case to be made and It's fair that something was was uh done In terms of the way that uh you know the Earned program was put together the Scheme of it the packaging I'll be Open-minded I I again this just happened Last night so there's still plenty for Me to learn and you to learn and the Attorneys within our community the XP Community to learn and additional Analysis so I I'm willing to be Persuaded here but one part again where I'm not going to to bend at all is this Idea that the crypto assets themselves Are securities and that does seem to be
Exactly what uh what the SEC is arguing So uh attorney raspoli responded and Said I would say both my hot take though Is the way is the way uh SEC alleges the Earn agreements were packaged and sold It will be easier for it to prove the Agreement was a security slash Investment contract without having to Prove underlying asset status Now in a separate thread though he Retweeted himself and then said the Following and this is where we're Getting to the claim of crypto assets Themselves being Securities which is Absolutely egregious but I'll show you Exactly where they cited it so attorney Grace pulley said upon a deeper dive There is one mention on paragraph 19 That courts have found crypto assets to Constitute investment contracts but as I Initially stated the overwhelming focus Is on the earn program and not the Underlying crypto in the program Think gbtc shares being Securities even Though underlying Bitcoin is not and so I'll just pause to note of course what He's talking about there he's talking About the uh a grayscale Bitcoin trust It's known as gbtc for short the Grayscale Bitcoin trust is uh well Obviously part of grayscale I'm sure Most of you are familiar at this point Or at least heard of them and that's Also part of uh Barry silbert's digital
Currency group it's its own firm little Subsidiary there and so what he's saying Here is gbt itself is a security But because you buy into that itself It's an investment vehicle for Accredited investors but the Bitcoin On which it represents is not the Security and so that's what he's saying Here and then attorney respoli says Further as litigation progresses nothing Limits the SEC from amending to more Clearly argue certain cryptos are Security slash investment contracts We'll have to see how it plays out and Here's what he's talking about in Paragraph 19 here I'll just highlight This for those who care to look at your Screen uh reads as files this is what The SEC alleges in their lawsuit against Genesis and Gemini courts have found That novel or unique investment vehicles Constitute investment contracts Including interests in Orange Groves Animal breeding programs railroads Mobile phones and Enterprises that exist Only on the internet including crypto Assets folks right there that is Dangerous and like I've been saying and I'm not the only one obviously the SEC Believes that the asset itself is the Security they freaking wrote it right Here and they say courts have they're Arguing that courts have found that to Be the case now courts haven't found the
Asset itself to be that but they're Alleging it here it's on your screen Courts have found that novel or unique Investment vehicles constitute Investment contracts and then they cite Crypto assets the crypto assets Constitute the investment contract the Assets themselves it's on your screen So the the SEC can pretend like this Isn't what they believe but this is what They believe And it couldn't be more clear here this Is the most flagrant evidence of this I've seen it's it's written more clearly Here than anything that I can recall off The top of my head in the SEC V Ripple Case and I've read I believe every Single legal document that has been Posted And if there's something if I'm wrong if There's something that's more flagrant In the STD Ripple case I'm just not Thinking of you tell me but I don't Think there is They're saying it right there how Offensive is that it's outside of legal Precedence and the law and they're still Asserting it and it's just a small part Of what they assert here and the thrust Does seem to be on the way that their Package you know a Gemini packaged The earn program the two consumers but Still we need to watch this and we need To push back against this crap as a
Crypto Community even though the Winklevoss twins clearly didn't want to Come to help the xrp community I think That we need to band together anyway and Push back against this nonsense garbage Now you have John Reed Stark who uh was A formerly working at the SEC I believe He's an attorney And um yeah there you go that's right Duke University School of Law Uh so this guy has a bunch of nonsense Opinions about crypto he thinks Everything is a security in fact he He said something within the last week Or two I highlighted a video where he Seems to think that even Bitcoin is a Security he he actually kid you not I Highlighted it in a recent video but Anyway so here's what he said the SEC Uh hit block five for failing to Register it's crypto lending program Stopped coinbase from launching its Crypto lending program and just hit Gemini slash Genesis for its earn crypto Lending grift buckle up in SEC Regulatory Onslaught is just beginning Yeah on that part I do believe from Onslaught just the beginning which is Why we all do need demand together and Knock off the damn tribalism crap which Is you know not so much coming from the Xrp community but it's it's out there And we should all band together and push Back against this numbers this garbage
Because if we work together it's much More likely we're going to see success I just I just wish that you know Especially the Bitcoin Maxi types and All the others out there and the xrp Haters have been listening for you know A little over two years ago you know you Could have a different environment today But anyway attorney Deaton jumps in and Says John block five settled for 100 Million dollars what changed Did it register it's crypto lending Yield receiving product because the Blockfi continued with it after the Settlement was it registered with the SEC did the market get any further Clarity considering the product Continued was it a tax I'm not being Argumentative I'm asking serious Questions there's a valued argument that Some of these yield products fall under The purview of the SEC there should have Been some clarity however after the Block 5 settlement since the product Continued so there you go so even Attorney John Deaton and it looks like He's still reserving judgment perhaps to Some degree if I'm reading them right Anyway that you know perhaps uh it could Be the case that the way this is Packaged could be a violation and I'm an Open book here too admitted like I'm Willing to be persuaded it's just when It comes to the the crap claims about
The assets themselves the Cryptocurrencies being the Securities no No wiggle room there whatsoever oranges Are not Securities uh either no no no Not a chance in hell Um and then there's Gabriel Shapiro who Is a an attorney just not really so much Part of the xrp commuter though he has Talked about the secb Ripple case but he He shares his legal opinion on Twitter About all sorts of stuff that's Happening in crypto And he although seems to think that the SEC is in the right here uh don't think For a moment that he's being some sort Of Troll he's just on offering his open Honest legal opinion and respectful Adults can respectfully disagree Basically so whether you think he's Right or wrong that's fine he's just Sharing his opinion here and even Attorney John Deaton seems to think that There there may be some validity perhaps To uh what they're saying so I don't Want to put words in Deaton's mouth Either I'm just saying if I'm reading Him right it looks to me like perhaps Um that could be the case but maybe He'll come out and you know say Something to the contrary so I'm just Trying to provide full context here Without cramming words into people's Mouths that's the last thing I want to Do but Gabriel Shapiro says I've said it
Throughout 100 of these earn type Programs are debt Securities they are Fully trustful and exactly why Securities laws exist it's not even Reasonably debatable in my opinion I Have zero problem with this SEC Enforcement action so that's what Attorney Gabriel Shapiro had to say now Attorney Deaton responded and wrote If We evaluate this case in a vacuum Without considering anything else only The product being offered and the law I Would be far less critical blockfi Settled for 100 million dollars over its Yield product what changed what guidance Was provided was that a tax what got Registered and those are all perfectly Reasonable questions of course now Somebody named Adrian responded to him And wrote are you saying you don't think These types of of notes are securities And then somebody else jumped in and Said I guess the name is Uh it says I don't think so he is saying There is no Market guidance in the Settlement no one knows what other Exchanges must do to comply This might be so the SEC holds their Revenue no money in exchanges comply Before they can comply can collect And then Adrian jump back in and said What they need to do is comply with Existing laws if they're selling a Security like this do it publicly like
Ford does with their program or Privately like Mercedes-Benz Financial Does with theirs it's not complicated He's being disingenuous so Adrian's Calling John Deaton disingenuous and That is not correct attorney Dean has Definitely not being disingenuous and uh Consumption jumps into defense himself He says I'm not being disingenuous at All I'm asking serious questions what Did block fi do differently after the Settlement was there a registration Disclosures And I think that's perfectly reasonable Less because you know if all this is Supposed to protect the consumer the Investor Is it is it it's totally reasonable to Ask that I'm not seeing anybody that's Extra super duper protected by any of This Um and then Gabriel Shapiro jumps back In attorney and says block five was in The process of registering yeah unlike With a lot of pure D5 crypto stuff I do Think that's totally appropriate and the Way this has played out shows why these Centralized lending interest programs Should be SEC registered so that's where We're at you all let me know what you Think I pretty well said what my Perspective is to this point Um given that this is a newer Development I
Well I'm always willing to be persuaded But in an instance like this it's easier To persuade me because this is a story That's developing so if you have a Strong stance one way or another let me Know and I'm at a stage right now where I'll be since I don't have a 100 like Strongly formed opinion I'm willing to Be persuaded for me right now it's Mostly just like SEC is a terrible organization I don't Like the way that they're approaching This even if they're technically right And we need to push back against them When they argue crap like Cryptocurrencies by the nature of them Existing our Securities that's what I'm Saying that's pretty much my stance at This point in a nutshell what's yours I'm not a financial advisor you should Not buy yourself anything because of Anything I say or right that would be a Very very very bad idea until next time To the Moon family sedan
