Updates in the Crypto Industry: Ripple’s Costly Legal Fight, Bittrex’s Bankruptcy, and Emergence of a Fresh Blockchain Network

A Million-Dollar Question in Crypto: Can Tokens be Considered Securities in the United States?

The issue of whether tokens can be considered securities in the United States is a million-dollar question in the crypto industry. Several crypto companies have staked a lot of money on it. The U.S. Securities Exchange Commission (SEC) sued payment platform Ripple in 2020, with defense costs already exceeding $200 million. The SEC claims that Ripple sold XRP tokens as an unregistered security, much like it has accused many other crypto companies recently. Despite the possibility of expensive litigation with regulators, companies and projects continue to push the boundaries of what can be considered a security. The Arbitrum Foundation, which is behind the Arbitrum blockchain, has proposed rewarding Ether tokens worth over $6 million to holders of its native Arbitrum (ARB) token generated through base fees and surplus revenue from network transactions. While the proposal has gained support, some community members are concerned that revenue distribution may classify the ARB token as a security.

Crypto Biz: Latest Updates

Here are some of the latest updates from the crypto industry:

• Defending against SEC to cost Ripple $200 million, CEO Brad Garlinghouse says
• Ripple CEO Brad Garlinghouse revealed during a fireside chat at the Dubai Fintech Summit that the SEC case has already cost the company $200 million. He also highlighted that the United States is lagging behind in regulatory progress compared to the United Arab Emirates and the recent Markets in Crypto-Assets bill in the European Union. The SEC sued Ripple in December 2020, alleging that it illegally sold XRP tokens as an unregistered security.
• Microsoft, Goldman Sachs, others partner in new blockchain network
• A new blockchain network called the Canton Network is in the works for financial institutions. Participants include Microsoft, Goldman Sachs, and other finance and tech companies. The platform is built on Daml, the smart contract language of Digital Asset, creating an interoperable system where assets, data, and cash can synchronize across linked applications.
• Bittrex files for Chapter 11 bankruptcy just weeks after SEC charges
• Bittrex, a cryptocurrency trading platform, has filed for Chapter 11 bankruptcy protection in the United States. The move comes after the SEC charged the company and its co-founder for securities violations in April. Funds are reportedly safe and will be handed over to the court.
• Arbitrum’s DAO to receive over 3,350 ETH revenue from transaction fees
• Arbitrum plans to distribute nearly $6.2 million worth of Ether tokens to its community. The funds come from base fees and surplus revenue generated from network transactions. The proposal has broad support, but some community members raised concerns that the revenue distribution may classify the ARB token as a security.