BREAKING: US Department Of Justice Calls Cryptos Commodities• January 1, 2023 7:48 pm • Comments
The US Department of Justice just made an important announcement which will greatly strengthen Ripple’s defense in its lawsuit against the SEC.
Essentially, a court filing by the US Department of Justice revealed that it considered two specific cryptos as commodities instead of securities.
This classification that was used by the DoJ could prove to be useful in the XRP lawsuit as well as the two cryptos that were classified as commodities were quite similar to XRP.
The two digital assets that were discussed were the tokens CRV and MNGO and neither of them were called securities or fell under the authority of securities law.
The way that these assets were classified goes directly against the SEC Chairman Gary Gensler’s classification on which assets are considered securities.
Therefore, it may be likely that the SEC will have to go against the Department of Justice’s reasoning if it wants to win the XRP lawsuit.
looks like the Department of Justice is calling MNGO and/or CRV commodities (and not securities)!!!! pic.twitter.com/ZklOlubR8u
— scott🍈 (@scott_lew_is) December 27, 2022
In the indictment, the Justice Department writes unequivocally of CRV and MNGO tokens as commodities. It states:
AVRAHAM EISENBEG, the defendant witifully and knowingly, directly and Indirectly, used […] in connection with swap, a contract of sale of a commodity in interstate and foreclosure commerce, and for future delivery on and subject to the rules of a registered entity, a manipulative and deceptive device and contrivance, in contravention of Title 17, Code of Federal Regulations, Section 180.1, […]
For Ripple, the DoJ may have provided another argument that the legal situation for cryptocurrencies is not as clear as the SEC always claims. Since both CRV and MNGO are designated as commodities, it is at least reasonable to assume that XRP is a commodity and not a security.
Whether or not the Department of Justice is going to be able to influence the SEC’s recent actions is going to be debatable however.
After all, this is not the first time that the SEC has been in conflict with another government entity or with lawmakers in Congress.
What is interesting to note is that all of these new classifications are coming out of lawsuits and litigations.
It seems that the government is essentially trying to regulate the industry through a litigation strategy rather than actually setting clear guidelines in the future.
Investors believe that this pattern may continue for a very long time if no clear guidelines are ever established and everything is up to the SEC’s interpretation.
If things are left up to interpretation, then there will always be a picking of winners and losers which is not fair to all the crypto projects in the market.
Gary Gensler: All crypto is a security!
DOJ: Hold my beer
U.S. Department of Justice calls CRV and MNGO commodities – not securities. At no point did the DOJ lawyers refer to the cryptocurrencies as securities, nor do they refer to violations of securities law.
— BITBUSTER (@bitbustercrypto) December 28, 2022
Scott Lewis, co-founder of DeFi Pulse agrees with Shapiro and stated that the government is not announcing a new policy toward tokens with this document. Nevertheless, inconsistent policy toward crypto tokens is evident, he said.
*All* government policy is a litigation strategy. Including Ripple and LBRY enforcement actions.
Matt Feinberg, an attorney at Falcon Rappaport & Berkman LLP added:
Maybe. But that’s because they believe it’s easier to prove that its a commodity, which infers that the commodity theory makes the most sense from a practical standpoint. Also keep in mind this is the DOJ choosing to use commodities law, not a CFTC enforcement action.
At press time, the XRP price stood at $0.3587, retracing from yesterday’s high of $0.3741.
That moment the US department of Justice identifies crypto as commodities. 😉 pic.twitter.com/6s0JcphRuE
— Cryptic Poet (@1CrypticPoet) December 28, 2022
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