VC firm makes compelling argument why XRP is not security
Ripple continues to find new supporters in ongoing lawsuits. is one of the newest IdealA VC firm that backs cryptocurrency and Web3 companies and protocols.
Paradigm remains one of the largest investment firms in the crypto industry, launching a record-breaking $2.5 billion fund in November last year, which was surpassed in May by a $4.5 billion fund from Andreessen Horowitz. That said, this begs the question of why it would be interested in the Ripple lawsuit.
Paradigm says the outcome of the Ripple lawsuit has the potential to dramatically impact the design and operations of crypto and Web3 companies, hence the request for the filing of an amicus brief.
The firm says it wants to participate in the case because it is concerned that a decision casually adopting the language advocated by the SEC could have sweeping and unintended effects on Paradigm and others who seek to utilize new technology in a way that could benefit users.
On the surface, the case may be about whether certain offers and sales of XRP tokens were securities offerings. But the SEC’s rhetoric goes far beyond claims of necessity or support of the law, as the SEC claims that the XRP token and, by extension, many other crypto assets are themselves securities.
In a document addressed to the court, Paradigm argued that the SEC’s attempt to obtain new authority through the court was a regulatory overreach.
The main argument of the model is based on the incorrect use of the Howe test. states that an extensive study confirms that no federal appellate court has held that an asset that is the object of an investment contract transaction is itself a security or that a subsequent transfer of that asset would be a securities transaction. , nor did the SEC cite any such authority.
In a recent update shared by James K. Filan, two attorneys, Kayvan B. Sadeghi and Shailee Diwanji Sharma, have filed appearances on behalf of Paradigm Operations in the lawsuit.
