This Week on Crypto Twitter: XRP Scores Courtroom Victory Against SEC, Cryptoverse Explodes

The firestorm was first kindled when an obscure crypto intelligence firm called Arkham tweeted that it was opening an intelligence exchange where people could post bounties to incentivize blockchain analysts to identify the people or companies behind any wallet or transaction.

Crypto Twitter went veritably ape and lambasted the idea.

Announcing The World’s First On-Chain Intelligence Exchange

Buy and sell information on the owner of any blockchain wallet address—anonymously, via smart contract. pic.twitter.com/4xr7dLvOjp

— Arkham (@ArkhamIntel) July 10, 2023

Decrypt covered the funniest responses that day. Needless to say, Arkham CEO Miguel Morel was keen to clear the air. He sat down with us later in the week over a Telegram call and assured us that his model wasn’t a “dox-to-earn” program and that any harmful uses would not be allowed.

Although the case is most certainly not closed, the real hot topic of the week was Ripple’s courtroom victory against the SEC. A judge ruled that the sale of XRP tokens to the public was not a violation of securities laws—something that the industry long maintained.

Before we get onto that, however, let’s take a look at some of the other big tweets this week.

On Monday, Will Clemente, the founder of blockchain research firm Reflevity, pointed out a strange convergence of two important crypto milestones next year.

Another day, another bust for blockchain gumshoe ZachXBT. This time he was following the trail of a phishing scammer who used his purloined funds on luxury items, including a pretty loud Rolex watch, shamelessly posting pics on social media.

1/ An investigation into the YouTuber turned phishing scammer Blue (Jack) who has worked with Monkey Drainer and other drainer services to steal more than $1.5m pic.twitter.com/MKRlaCuMI5

— ZachXBT (@zachxbt) July 10, 2023

Bloomberg’s James Seyffart on Tuesday shared a subtle but significant amendment to the Chicago Board Options Exchange’s refiled Bitcoin ETF applications. Looks like Coinbase is everyone’s go-to partner for the “surveillance-sharing agreement” (SSA) side of the application. BlackRock and Valkyrie both did the same last week in their respective applications.

The SEC wants to see SSAs in the ETF applications because they deter fraud and manipulation by outlining how applicants will monitor market trading activity and clearing activity and verify customer identity.

UPDATE: @CBOE has filed amendment’s for all 5 of their #Bitcoin ETF applications. The one change I can find is different language about CBOE’s SSA with Coinbase. Changing from “Expecting to enter” to “reached an agreement on terms”. pic.twitter.com/25qK0x9lHg

— James Seyffart (@JSeyff) July 11, 2023

Crypto lawyer Lewis Cohen on Wednesday tweeted a small thread about why he’s excited for a new version of the Responsible Financial Innovation Act. In a later tweet, he even suggested the U.S. still has a chance to “set the standard” in crypto legislation and outdo the European Union’s recently passed MiCA framework.

1/ So excited!! Sen. Cynthia Lummis just announced on Squawkbox that a revised version of the Lummis-Gillibrand Responsible Financial Innovation Act is being introduced in the Senate today. This is BIG NEWS. pic.twitter.com/PQgOoLjIXC

— Lewis Cohen (@NYcryptolawyer) July 12, 2023

Another crypto lawyer, Marisa Tashman Coppel—senior counsel at pro-crypto policy lobbying group The Blockchain Association—has many questions for the SEC about Prometheum, a crypto company that suddenly appeared on the scene and has been conveniently touted as an upstanding and compliant firm by the commission.

1/ Today, the @BlockchainAssn submitted a letter to the SEC’s Inspector General calling for an investigation into the circumstances surrounding Prometheum.

Although there may not be anything nefarious, suspicious circumstances beg someone to look under the hood…

Key Qs pic.twitter.com/Gp7bx7WD5X

— Marisa Tashman Coppel (@MTCoppel) July 12, 2023

Republican congressman Richie Torres called for an investigation into Prometheum the following day.

@SECGov is acting like an overzealous traffic cop arbitrarily ticketing drivers while keeping the speed limit a secret.

It prefers to communicate by enforcement rather than by rules or guidance. But that’s no way to regulate digital assets.

I’m calling for an investigation. https://t.co/ZbiSk6oQ9F pic.twitter.com/n0hijAREDC

— Rep. Ritchie Torres (@RepRitchie) July 13, 2023

Things went from bad to worse for the Multichain cross-chain bridge this week. The protocol has had some transactions frozen since May. In its latest announcement, it says it has shuttered operations as its CEO and his sister are in the custody of Chinese police, the team’s operational funds have been impounded, and over $200 million in customer funds is up in the air. Ouch!

1. On May 21, 2023, Multichain CEO Zhaojun was taken away by the Chinese police from his home and has been out of contact with the global Multichain team ever since. The team contacted the MPC node operators and learned that their operational access keys to MPC node servers had…

— Multichain (Previously Anyswap) (@MultichainOrg) July 14, 2023

Crypto Twitter basks in Ripple’s victory

FOX business journalist Eleanor Terrett was one of the first to break the major news on Thursday that a judge ruled that XRP “is not necessarily a security on its face” and programmatic sales of XRP to the public did not break securities laws.

BREAKING: Judge Torres says @Ripple’s Programmatic Sales, the Other Distributions, and Larsen’s and Garlinghouse’s sales of #XRP do NOT constitute investment contracts. Documents and details to come. pic.twitter.com/3sTV12bleL

— Eleanor Terrett (@EleanorTerrett) July 13, 2023

It’s party time, said Ripple CEO Brad Garlinghouse.

(and let’s start planning that proper party!)

— Brad Garlinghouse (@bgarlinghouse) July 13, 2023

Lawyer Stephen Palley pointed out that some institutional sales of XRP ($728 million worth) did qualify as securities offerings. Later in the thread he described the event as “more of a win” than he was expecting.

so basically institutional sales were securities transactions

programmatic sales and distributions to employees were not

court punts on whether secondary market sales are securities transactions (see footnote 16) but seems trending that way

case goes to trial https://t.co/A6wIUTZhaz pic.twitter.com/97QuSAMBsf

— Palley (@stephendpalley) July 13, 2023

Crypto fan and streamer RookieXBT saw the ruling as a historic milestone.

this is literally better news than an ETF approval but you just don’t get it yet

— RookieXBT (@RookieXBT) July 13, 2023

Andrew Kang, co-founder of crypto venture firm Mechanism Capital, said the news was a win for Ethereum too.

Gemini co-founder Cameron Winklevoss was overjoyed. He trash-talked the SEC back into the Mesozoic era, where it belongs—according to him. Threat neutralized.

The sale of XRP on exchanges is NOT a security. Which means the sales of all cryptos on exchanges are NOT securities and @SECGov and @GaryGensler have NO jurisdiction over them. This is a watershed moment that relegates the SEC to TradFi and makes it a dinosaur regulator. Buh-bye pic.twitter.com/PRuumqQBEL

— Cameron Winklevoss (@cameron) July 13, 2023

Eleanor Terrett shared the SEC’s response, which reads like Gary Gensler smiling through gritted teeth.

Finally, CoinGecko wanted you to know that XRP flipped BNB on Thursday. It’s no longer the case now though.

What a week!