Casey Wagner

A federal judge has issued a timeline for when we can expect to hear the US Securities and Exchange Commission’s arguments against Ripple Labs and its current and former executives in front of a jury. 



The case is expected to go to trial in the Southern District of New York during the second quarter of 2024, court filings released Wednesday show. Both parties have two weeks to submit blackout dates to the court.&nbsp;



All parties have until Dec. 4, 2023 to submit all pretrial filings, document exhibits and motions to exclude evidence from the jury, the judge added. 



The latest filing comes weeks after Judge Analisa Torres <a href="https://blockworks.co/news/judge-rules-ripple-xrp-not-security">handed down a partial summary judgment</a> in the case, which started in December 2020. The court ruled that while <a href="https://blockworks.co/tag/ripple">Ripple</a>’s institutional sales of <a href="https://blockworks.co/price/xrp">XRP</a> were found to constitute an unregistered securities offering, programmatic sales were not.



The upcoming trial will determine the legal liability of Ripple’s founder and former CEO Christian Larsen and former chief operating officer and current CEO <a href="https://blockworks.co/tag/brad-garlinghouse">Brad Garlinghouse</a>. The two were charged with aiding and abetting securities laws violations with regards to Ripple’s XRP token. Ripple Labs does not face aiding and abetting charges.



While many in the crypto community and pro-Ripple camp saw the ruling as a major win, the summary judgment does not set a precedent for other tokens and issuers. 



Torres’ ruling did not determine whether or not a physical written contract is required as part of the Howey test. Ripple argues that because it did not have a written contract, it does not qualify as a security. 



The trial announcement came hours after a widely-circulated document claiming the <a href="https://blockworks.co/tag/sec">SEC</a> had elected not to appeal the programmatic sales ruling proved to be <a href="https://twitter.com/EleanorTerrett/status/1689295090353651712?s=20">fake</a>. XRP tokens rallied around 3% on the false reports.



The SEC has not filed an appeal yet, and it does not have a strict deadline to submit an interlocutory appeal. However, legal experts say that if an appeal is coming, it will likely be filed by the end of this week. Aug. 11 will be the 30-day mark from when the summary judgment was handed down, after which it will be harder for the SEC to make its case, Jeremy Hogan, partner at Hogan and Hogan, said in a <a href="https://twitter.com/attorneyjeremy1/status/1689243961318088704?s=20">tweet</a>. 



Per Torres’ summary judgment, either party must make its appeal request within a “reasonable” amount of time.



Updated Aug. 9, 2023 at 4:19 pm ET: Clarified current and former Ripple Labs executives are facing charges of aiding and abetting securities law violations. These charges will be determined at trial. Ripple Labs has not been charged with aiding and abetting.



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Ripple Labs v. SEC jury trial is set for spring 2024

New York City Mayor Eric Adams, who converted paychecks to crypto and angled the city as an industry hotspot, erred on a disclosure because he thought bitcoin wasn’t a security, his team said.  



Adams made an error on a mandatory report filed with the city’s Conflicts of Interest Board, his team said Thursday.&nbsp;



In his 2022 financial disclosure <a href="https://www.nyc.gov/assets/coib/downloads/pdf2/publicdocs/elected-officials-ad/2022/adams-e-2022-ad-report.pdf">report</a>, Adams answered “no” when asked if he held “any security (such as stocks, bonds, ETFs, mutual funds or cryptocurrencies) with a market value of $1,000 or more” at the end of 2022. <a href="https://www.nydailynews.com/news/politics/new-york-elections-government/ny-adams-to-amend-disclosure-after-failing-report-crypto-holdings-20230713-3ggmk5rpdzcyjjj63ahjmxzehe-story.html">Asked</a> about the lack of disclosure around his bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) and ether (<a href="https://blockworks.co/price/eth">ETH</a>) holdings, Adams’ team said he would be amending the disclosure.&nbsp;



Adams’ press secretary Fabien Levy told The New York Daily News Thursday Adams failed to report his crypto holdings because he thought only securities were included in the question, not currencies. <a href="https://blockworks.co/tag/sec">SEC</a> Chair Gary Gensler has said bitcoin is not a security.&nbsp;



Read more: <a href="https://blockworks.co/news/the-sec-says-these-crypto-assets-are-securities-their-reasoning-is-wrong">The SEC says these crypto assets are securities, but their reasoning is wrong</a>



Adams took office in 2022 and <a href="https://twitter.com/ericadamsfornyc/status/1456311827550384129?s=20">said</a> he would “take” his first three paychecks in bitcoin. In reality, the mayor converted his post-tax pay into crypto on Coinbase, he said. The move was part of the mayor’s broader plan to establish the city as a crypto hub.&nbsp;



“NYC is going to be the center of the cryptocurrency industry and other fast-growing, innovative industries! Just wait!,” Adams said on <a href="https://twitter.com/ericadamsfornyc/status/1456311827550384129?s=20">Twitter</a> after winning the election.&nbsp;



Presidential candidate Miami Mayor Francis Suarez, also known as a crypto proponent, indicated in his year-end 2022 financial disclosures that his crypto holdings were worth around $70,000. Suarez has said that he converts his $130,000 annual salary into crypto via Stripe.&nbsp;



Democratic presidential candidate Robert F. Kennedy Jr. said he would be accepting campaign donations in bitcoin. Financial disclosures from Kennedy reveal the candidate held between $100,001 and $250,000 of bitcoin through the second quarter.



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NYC Mayor Adams deems bitcoin not a security in disclosure mishap

<div id="highlights-block_61e998fc9a514" class="highlights">
 <ul>
 <li>Eric Adams is keeping his promise and will get paid in cryptocurrency on Friday</li>
 <li>The funds will be converted to BTC and ETH through Coinbase before Adams’ can access them</li>
 </ul>
 
</div>



New York City Mayor Eric Adams made good on <a href="https://cms.blockworks.co/new-york-mayor-eric-adams-i-will-take-first-three-paychecks-in-bitcoin/" target="_blank" rel="noreferrer noopener">his promise</a> to receive his first paychecks in cryptocurrency, the Office of the Mayor said Thursday.&nbsp;



Adams’ first paycheck, which arrives Friday, will be converted into bitcoin and ether through Coinbase before the funds are made available, according to the <a href="https://www1.nyc.gov/office-of-the-mayor/news/041-22/mayor-adams-receive-first-paycheck-cryptocurrency" target="_blank" rel="noreferrer noopener">statement</a>.&nbsp;



“New York is the center of the world, and we want it to be the center of cryptocurrency and other financial innovations,” Adams said in the statement.



<blockquote class="wp-block-quote">“Being on the forefront of such innovation will help us create jobs, improve our economy, and continue to be a magnet for talent from all over the globe.”</blockquote>



Adams had originally said via <a href="https://twitter.com/ericadamsfornyc/status/1456311827550384129?s=20" target="_blank" rel="noreferrer noopener">Twitter</a> that he would receive his first three paychecks in bitcoin exclusively. Thursday’s statement clarifies that some of his compensation will also be delivered in ether, but the breakdown between the two was not disclosed.&nbsp;



Creating a crypto-friendly city has been a central part of Adams’ platform. In November, he approved the launch of the NYCCoin, a token created by the CityCoin project. NYCCoin, currently available to trade on OKCoin, is mined by forwarding the Stacks token, $STX, to the NYCCoin smart contract. When tokens are successfully mined, a percentage of $STX forwarded by miners to the Stacks protocol goes into a wallet reserved for NYC.&nbsp;



Coinbase’s paycheck feature was <a href="about:blank" target="_blank" rel="noreferrer noopener">unveiled</a> in September. The exchange now allows users to have paychecks directly deposited into their exchange accounts.







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NYC Mayor Receives First Paycheck in Converted ETH, BTC

<div id="highlights-block_618e449496d75" class="highlights">
 <ul>
 <li>NYCCoin began mining Wednesday and is expected to start trading soon</li>
 <li>Mayor-elect Adams is excited about the opportunities crypto presents for New York</li>
 </ul>
 
</div>



Thanks to New York City Mayor-elect Eric Adams, the ‘NYCCoin’ token will become community-led project CityCoins’ second launch.&nbsp;



The announcement comes after CityCoins’ first project, MiamiCoin, brought in $21.3 million dollars for the South Florida city since it <a href="https://cms.blockworks.co/miami-has-earned-5-million-and-counting-in-miamicoin-funds/" target="_blank" rel="noreferrer noopener">began trading</a> in August. 



Anyone can transfer Stacks (STX) tokens to mine MiamiCoin, and a percentage is placed in Miami’s cryptocurrency wallet. MiamiCoin is available to trade on crypto exchange OKCoin.&nbsp;



“Miami has been an incredible success,” said Patrick Stanley, a CityCoins community lead. “The citizens of Miami have benefited to the tune of $21 million so far, and that&#8217;s only going to grow, it&#8217;s going to grow forever. The amount of money in Stacks that’s contributed never goes backwards and never stops, never stalls, it just keeps going up.”



Adams has quickly become known as a crypto-friendly mayor. He called bitcoin a “new way of paying for goods and services throughout the entire globe” during a <a href="https://www.cnbc.com/2021/11/08/bitcoin-in-new-york-eric-adams-says-crypto-should-be-taught-in-school.html" target="_blank" rel="noreferrer noopener">CNN interview</a> Monday, and has said that schools “must&#8221; teach about blockchain technology.



NYCCoin mining began on Wednesday, according to the CityCoins. Adams welcomed the project on Twitter, saying “we&#8217;re counting on tech and innovation to help drive our city forward.”



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">We&#39;re glad to welcome you to the global home of Web3! We&#39;re counting on tech and innovation to help drive our city forward. <a href="https://t.co/SY9pv1Ebct">https://t.co/SY9pv1Ebct</a>&mdash; Eric Adams (@ericadamsfornyc) <a href="https://twitter.com/ericadamsfornyc/status/1457803063666745346?ref_src=twsrc%5Etfw">November 8, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Miami officials voted to approve access to the funds, held in a crypto wallet, in September. On  Thursday, Miami mayor Francis Suarez told <a href="https://www.coindesk.com/business/2021/11/11/miami-to-give-bitcoin-yield-from-miamicoin-to-its-citizens/" target="_blank" rel="noreferrer noopener">CoinDesk TV</a> that the city will soon be distributing “bitcoin yield” to citizens, earned from staking MiamiCoin. 



“We’re going to be the first city in America to give a bitcoin yield as a dividend directly to its residents,” Suarez said during the interview.&nbsp;



Adams has not yet commented how NYCCoin funds may be used, but he did follow Suarez’s lead and stated that he would be accepting his first three paychecks in bitcoin. The two leaders <a href="https://twitter.com/FrancisSuarez/status/1456316140284678149?s=20" target="_blank" rel="noreferrer noopener">expressed on Twitter</a> their desire to make their respective cities into “crypto capitals.” 



<div class="wp-block-image"><figure class="alignright size-full is-resized"><img loading="lazy" decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/11/2021-11-12-Suarez-shutterstock_1749213761.png" alt="" class="wp-image-11048" width="220" height="282" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/11/2021-11-12-Suarez-shutterstock_1749213761.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/2021-11-12-Suarez-shutterstock_1749213761.png?w=234 234w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/2021-11-12-Suarez-shutterstock_1749213761.png?w=200 200w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/2021-11-12-Suarez-shutterstock_1749213761.png?w=203 203w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/2021-11-12-Suarez-shutterstock_1749213761.png?w=171 171w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/2021-11-12-Suarez-shutterstock_1749213761.png?w=62 62w" sizes="(max-width: 220px) 100vw, 220px" /><figcaption>Miami Mayor Francis Suarez</figcaption></figure></div>



“Having a leader like Mayor Suarez,” said Stanley, “who is not Republican, he&#8217;s not Democrat, he just wants to move forward, and same with Eric Adams&#8230;They&#8217;re like the perfect archetypes for leadership in the crypto era, and they&#8217;re going to accelerate and modernize their city as a function of just having the CityCoins.”&nbsp;



Suarez is in fact a registered Republican, although the mayor’s office in Miami is officially nonpartisan. Adams is a Democrat.&nbsp;



The CityCoins project is not the first to try a community token model. The Colu DLT platform shut down its blockchain-based Colu Local Network (CLN) token following <a href="https://icobench.com/ico/colu-local-network" target="_blank" rel="noreferrer noopener">a 2018 ICO</a> that raised $23 million in ether. CLN was used for retail purchases and encouraged consumers to shop locally with incentives. 



The token launched in four cities, including London and Tel Aviv, but Colu later cited regulatory and technical challenges as the reason for ending the project. The company <a href="https://www.crowdfundinsider.com/2019/08/151028-colu-gives-ico-money-back-apparently-companies-can-do-the-right-thing-also-without-a-regulator-telling-them-what-to-do/" target="_blank" rel="noreferrer noopener">repurchased and burned</a> all tokens in 2019. 



CityCoins is currently working on AustinCoin, according to its website. “Mining is coming soon,” the page states. In late September, the site listed SanFranciscoCoin as “coming soon,” although it has since been removed and no additional information has been released about the project.



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New York Mayor-Elect Gives City Token Seal of Approval

<div id="highlights-block_61410d5eb7dc3" class="highlights">
 <ul>
 <li>Regulation can bring clarity and security to the industry, especially for newcomers who have concerns </li>
 <li>Regulated financial institutions tend to consider regulatory concerns prior to product launch, which can slow the process but will exchange client trust</li>
 </ul>
 
</div>



Digital Asset Summit 2021, New York City — Banks and regulated financial institutions may be slower to bring products to market due to their regulatory requirements, but it helps to bolster client trust, Ziad Iskandar, senior lead, advanced solutions and digital assets unit at BNY Mellon, said during a panel at the <a href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" target="_blank" rel="noreferrer noopener">Digital Asset Summit</a> Tuesday. 



“Because we are regulated, that doesn’t always make life so easy, and it does influence product design,” said Iskandar. “We have continuous discussions about safety and soundness of what we are doing and if you are a client, those are questions you want answered.”&nbsp;



Taking a conservative regulatory approach may not be the fastest way to give clients exposure to cryptocurrencies, but it is never time wasted, Iskandar said.&nbsp;



In terms of bringing sound products to market, regulated institutions are more familiar with the process and framework, Ben Reynolds, chief strategy officer at Silvergate Bank, said during the panel. 



<div class="wp-block-image"><figure class="aligncenter size-full"><img loading="lazy" decoding="async" width="599" height="356" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/IMG_3415.jpeg" alt="DAS panel" class="wp-image-7905" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/IMG_3415.jpeg?w=599 599w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/IMG_3415.jpeg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/IMG_3415.jpeg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/IMG_3415.jpeg?w=439 439w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/IMG_3415.jpeg?w=368 368w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/IMG_3415.jpeg?w=80 80w" sizes="(max-width: 599px) 100vw, 599px" /><figcaption>The Future of Financial Services and Digital Assets Panel at Digital Asset Summit 2021.</figcaption></figure></div>



“When you are a regulated institution, there is a clear path for launching products and defined standards that need to be met and maintained,” He said.



When it comes to new projects and protocols, these players often do not have the same considerations in mind. Project launch comes before regulatory considerations, Reynolds said.&nbsp;



The panelists agreed that <a href="https://cms.blockworks.co/gensler-investors-are-not-protected-when-it-comes-to-crypto/" target="_blank" rel="noreferrer noopener">regulatory</a> clarity in the space will help to advance the digital asset industry and give investors a greater sense of security. 



“There is money on the sidelines that’s waiting for the space to be more regulated,” said Reynolds. “​​As regulation comes in and as some of these questions start to get figured out, I think that more capital will come into the space, and a rising tide lifts all boats.”



Are you a UK or EU reader that can’t get enough investor-focused content on digital assets?<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Join us</a> in London on November 15th and 16th for the Digital Asset Summit (DAS) London. Use code ARTICLE for £75 off your ticket. <a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Buy it now</a>.