Judge Torres Rejects Proposed Settlement Between SEC and Ripple

SEC, Ripple wants to settle crypto lawsuit, but US judge rebuffs them

A federal judge on Thursday rejected an unusual joint motion by Ripple Labs and the U.S. Securities and Exchange Commission to endorse the cryptocurrency company’s reduced $50 million fine to settle a civil lawsuit over the sale of unregistered securities.

U.S. District Judge Analisa Torres in Manhattan chastised both sides for claiming that their settlement in March should excuse Ripple from honoring her permanent injunction against violating the law. […]

“The parties do not have the authority to agree not to be bound by a court’s final judgment that a party violated an Act of Congress in such a manner that a permanent injunction and a civil penalty were necessary to prevent that party from violating the law again,” she wrote.

“Accordingly, if jurisdiction were restored to this court, the court would deny the parties’ request to vacate the injunction and reduce the civil penalty,” she added.

Torres said the SEC and Ripple remain free to withdraw their appeals, or appeal her injunction.

SEC Rethinks Market Surveillance Tool Some Investors Want to Axe

The Securities and Exchange Commission this month moved to pause litigation challenging its Consolidated Audit Trail, first proposed following the 2010 “flash crash” that wiped out $1 trillion in market value.

The SEC is reviewing the tool, which requires broker-dealers, exchanges, and clearing firms to report equity and options trade data in real time, following industry concerns about data security and costs to market participants now approaching $250 million a year.

But the only step that suffices would be to “kill the CAT,” a conservative think tank and investor plaintiffs said in a brief in Texas federal court last week, arguing the “dystopian surveillance scheme” was never endorsed by Congress and that it amounts to spying on US traders.

Anyone Can Sell You SpaceX Stock

That is, it’s a cash-settled forward on SpaceX stock: When there’s a liquidity event, Republic will pay its token-holders cash for the value of the stock, which is economically equivalent to giving them the stock. Is it a naked forward? Well, probably not:

“Republic plans to hold shares of or have some other exposure to the underlying security, Nguyen said.”

But it’s none of your business. Republic’s disclosures are clear that the tokens are “a debt obligation of RepublicX LLC, not an equity interest in SpaceX”; “the token gives you exposure to SpaceX’s price movements only through the contractual payoff structure”; the token “does not give you any equity, debt, contractual claim, option, warrant, or other right against SpaceX”; “your sole counterparty is RepublicX LLC, which alone … is responsible for all payment and reporting obligations under the notes”; and the tokens “reference SpaceX share value solely as an external benchmark for calculating potential payouts.” That is: Republic will eventually owe you the value of the SpaceX shares on a liquidity event, but how it comes up with the money to pay you is its problem.

Crypto Industry Moves Into the U.S. Housing Market

The nation’s largest mortgage finance firms will begin accepting crypto as an asset on a mortgage application, another significant step by the Trump administration to bring digital currencies into mainstream finance.

This week, President Trump’s housing director, William Pulte, said he would direct Fannie Mae and Freddie Mac — the nation’s big mortgage finance firms — to consider home buyers’ crypto investments as part of their overall wealth in assessing whether they can afford a mortgage. Traditionally, a home buyer’s cash savings and stock investments are what mortgage lenders consider.

House Plans Single Vote to Move Genius and Clarity Crypto Bills

House Republicans aim to get the Senate’s landmark stablecoin legislation — known as the Genius Act — to President Donald Trump’s desk for signature as soon as the week of July 7, according to people with direct knowledge of the strategy.

Their strategy, subject to change, would also allow the House to bring its crypto market-structure bill — known as the Clarity Act — to a full floor vote. The plan calls for the two separate measures to advance in a single procedural vote, the people said, asking not to be identified discussing behind-the-scenes legislative efforts.