Selling crypto mining equipment and offering hosting services for the equipment constitutes an "investment contract" under Howey.
Yes. You read that right.
Here's what you need to know. 👇
2/ The case was filed in federal court in Utah.
Some of the mining machines at issue are Bitcoin Antminers.
To my knowledge, the SEC has NEVER issued guidance (formally or informally) that even hinted that selling mining equipment could be an unregistered securities offering.
3/ Many public companies doing business in the US today are selling mining equipment and offering hosting services right now--
And they have been in this business for years--with no apparent complaint from the SEC.
4/ The SEC's attempt to extend its jurisdiction to sales of mining equipment (with no prior warning) is just the latest in a growing line of cases where the SEC is attempting to stretch beyond its statutory authority.
The overreach is accelerating.
Congress needs to act.
5/ Note: I previously worked with the lawyers representing some of the defendants in the Utah case.
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I just finished reading Judge Torres' 57-page ruling on the admissibility of expert testimony in SEC v. Ripple.
As a trial lawyer who handled a number of securities cases in the Southern District of New York, I have 5 takeaways from the Judge's Order.
1/ The Judge's rulings on admissibility are legally sound and unlikely to be disturbed on appeal--which is no surprise.
The Judge demonstrates a good grasp of XRP and the related technology and excellent command of the legal issues, claims and defenses in the case.
2/ Both sides (appropriately) pushed the envelope on the expert testimony they wanted to submit, so it is no surprise that both sides had some testimony excluded.
The judge drew the line in a consistent manner, with no bias or leanings or tea leaves discernible to me.
1/ The creditors who object to Sullivan & Cromwell serving as Debtors’ counsel have filed an emergency request to delay the hearing scheduled for later this morning.
The reason for the requested delay is the last minute filing by Daniel Friedberg.
2/ The objectors say they had no prior knowledge of Mr. Friedberg’s intent to file the declaration.
And they need time to investigate the shocking allegations Mr. Friedberg has made against Sullivan & Cromwell.
3/ The objectors also say they need to make sure Mr. Friedberg will show up for any hearing on the motion to appoint S&C as Debtors’ counsel.
As noted in my prior thread, if Mr. Friedberg doesn’t show up, S&C would likely move to strike the declaration on the grounds of hearsay.