Last month’s decision by a court in the U.S. District Court for the Southern District of New York on the SEC’s claims against Ripple Labs has been generally hailed as a victory for the token issuers and exchanges. However, the actual impact of the decision on the future of cryptocurrencies in the U.S. is not so clear.
By highlighting the principle that the SEC’s jurisdiction over digital assets depends on the nature of the offer or sale of such assets rather than the intrinsic qualities of the asset itself, the decision is indeed a positive development for the industry. But other favorable aspects of the decision for Ripple seem ripe for a reversal on appeal. Ironically, that could strengthen the SEC’s hand going forward.
An unusual decision
The SEC’s claims against Ripple hinged on whether Ripple’s distribution of its cryptocurrency, XRP, was a “security” for the purposes of the Securities Act. More specifically, the question was whether these transactions satisfied a three-pronged test for an “investment-contract” security devised by the Supreme Court over seven decades ago in SEC v. W.J. Howey Co.
Under the Howey test, transactions involving the (1) investment of money in (2) a common enterprise with (3) an expectation of profit from the efforts of others, are securities. If these transactions were securities, Ripple was required to make certain public disclosures (which it concededly did not make), along with observing other compliance obligations.
The court concluded that certain negotiated sales of large blocks of XRP institutional purchasers satisfied the Howey test (sales the court called “institutional sales”)–but that anonymous sales by Ripple on cryptocurrency exchanges (so-called “programmatic sales”) did not, nor did Ripple’s transfer or XRP to vendors or employees in exchange for services (termed “other distributions”). Thus, the SEC prevailed on its claim as to the institutional sales, but not as to other types of distributions of XRP. The SEC’s related claims against Ripple’s founder, former CEO, and current chairman of the board Christian Larson and the former COO and current CEO, Bradley Garlinghouse over Ripple’s institutional sales will continue to trial. Larson and Garlinghouse deny any wrongdoing.
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The most striking feature of the decision is that the court applied the “expectation” element of the “expectation of profit from the efforts of others” differently to different groups of purchasers.
Normally, courts focus their analysis of this prong of the Howey test on whether a person with knowledge of all public information about the role of the people offering an investment (typically called “promoters”) in the future success of the investment would expect that the promoters’ ongoing efforts are key to profits. Instead, the court focused on the actual information available to different sets of purchasers. The court reasoned that since the institutional purchasers knew they were buying XRP from Ripple, and were provided marketing materials from Ripple, they would expect the value of the XRP to be affected by Ripple’s efforts. By contrast, the programmatic buyers’ assumed relative ignorance of Ripple’s role in developing, marketing, and distributing XRP led the court to conclude that these buyers would not reasonably expect Ripple’s activities to affect XRP.
As for the other distributions, the court concluded these transfers lacked the necessary “investment of money” to satisfy the Howey test. The ruling is in contrast to the SEC’s longstanding position that nearly any benefit to the promoter has value and can be considered an investment of money.
What it means for the industry
The cryptocurrency industry has long advocated for a more transaction-focused approach to Howey. By distinguishing among groups of XRP purchasers, the Ripple decision delivers one.
Animating the industry’s goal in this respect is a desire to exclude secondary market transactions from the SEC’s jurisdiction, among other motivations. The question is existential for many market intermediaries, particularly cryptocurrency exchanges, whose subjection to SEC jurisdiction turns on whether they deal, broker, clear, or operate an exchange for trading securities.
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Here, the Ripple decision delivers for the industry again. By holding that knowing one’s privity with the promoter is key to the expectation of profit from the efforts of others, the court comes close to carving out secondary market transactions per se, and even (as was the case with the programmatic sales) immunizes anonymized direct sales from promoters like Ripple.
Similarly, if it stands, the court’s formalistic interpretation of the investment-of-money prong of Howey would seem to open the door to more extensive use of digital assets in employee compensation, developer grants, and promotional giveaways (eg. airdrops, a popular if controversial tool for the distribution of crypto tokens).
How an appeal could make things worse
Before the cryptocurrency industry spends too heavily on champagne, it should remember that the Ripple decision is not a precedential opinion, nor is it necessarily the last word on the case. The SEC has the right to appeal–and is expected to use it.
Beyond its novelty, the court’s focus on XRP purchasers’ specific access to information about Ripple yields a perverse result. The sale of XRP to the most sophisticated investors, who by virtue of the bespoke nature of the transaction were privy to the most information about how Ripple’s activities may affect the value of XRP, is a security, subject to the investor protections and restrictions mandated by the securities laws. Whereas, the offer and sale of XRP to retail investors, who dealt with Ripple in anonymous transactions through exchanges and otherwise, is not a security and does not require disclosure or offer those same investor protections. Those people who already have the most information are given a right to more, while those people with the least information go without.
The court’s ruling on the “other distributions” seems on similarly shaky ground. In addition to running up against precedent that “sales” of securities need not involve the transfer of tangible items of value, this interpretation appears to open loopholes in Howey for various non-traditional forms of financing. Indeed, it is even difficult to square with the established concept of “sweat equity.”
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Should the Second Circuit Court of Appeals reverse either or both of the industry‑favorable elements of the Ripple decision, the SEC will be finally armed with precedential case law applying Howey to a cryptocurrency–a weapon of no small importance for its fights with the cryptocurrency exchanges Coinbase and Binance over whether the tokens they listed are securities.
Longer-term effects and benefits
Even if significant pieces of the Ripple decision are reversed on appeal, one aspect of the case is likely to provide lasting benefit to the cryptocurrency industry. The court was almost certainly correct to focus its Howey analysis on the transactions in question, rather than the underlying assets. Courts in the past have occasionally missed this subtle distinction–most likely because other parts of the definition of the term “security” in the Securities Act are tied to financial instruments themselves, such as stocks and bonds. But Howey addresses investment contracts, which is why its test focuses on the parties’ actions and expectations, which are driven by the facts and circumstances surrounding the relevant transactions.
Although the court’s distinction between groups of purchasers’ access to information is unlikely to survive appeal as meaningful for Howey test purposes, other purchaser differences might one day be dispositive. Most obviously, courts could draw lines between groups of purchasers over time. As decentralized token projects progress, it is plausible to imagine that the expected effect of the efforts of promoters on profits will change. These efforts might be relevant to profits for an early group of purchasers, but not for a later group after control of the project becomes fully decentralized. Similarly, as such projects mature, the motive for buying a cryptocurrency may change. A reasonable early purchaser might be drawn to financial returns (investment profits) while the primary motive for a later purchaser might be to use the token within a particular network or protocol (consumption).
If future courts take account of these distinctions between purchasers, defendants may have the Ripple court’s attention to differentiated transactional details to thank.
Peter Fox is a partner at Scoolidge, Peters, Russotti & Fox LLP.
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The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
This picture taken on March 19, 2024 shows Atsuko Sato (L) with her Japanese shiba inu dog Kabosu, … [+] best known as the logo of cryptocurrency Dogecoin, playing with students at a kindergarten in Narita, Chiba prefecture, east of Tokyo. Her fluffy face now frail, Kabosu still flashes the enigmatic smile that made her the go-to meme dog for millennials and inspired a $23 billion cryptocurrency beloved by Elon Musk. She’s best known as the logo of Dogecoin, but to Atsuko Sato, Kabosu is the elderly former rescue puppy who accompanies her every day to work at a kindergarten. (Photo by Philip FONG / AFP) / TO GO WITH Japan-internet-crypto-meme-Doge-wow, FOCUS by Katie FORSTER with Huw GRIFFITH (Photo by PHILIP FONG/AFP via Getty Images)
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Dogecoin’s market cap right now is almost $55B!
They said crypto would take over the world, but few imagined it would happen quite like this. Elon Musk’s appointment to President-elect Trump’s cabinet as head of the new Department of Government Efficiency (DOGE) has thrust a once-obscure “memecoin” onto the global stage. Cue commentators and citizens scrambling to undertake a crash course in Dogecoin.
How did this cryptocurrency, which began life as an in-joke, soar to the highest levels of government? Dogecoin was created by software engineers Billy Markus and Jackson Palmer. Markus, based in Portland, Oregon, wanted to create a cryptocurrency that was lighthearted and accessible, steering away from the complex, often intimidating world of Bitcoin.
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Meanwhile, Palmer, inspired by the viral “Doge” meme—a Shiba Inu dog captioned with Comic Sans text in broken English—suggested the name “Dogecoin” on Twitter. The meme’s playful energy captured the humor and absurdity that the creators wanted to inject into cryptocurrency.
A laptop keyboard, Elon Musk post about DOGE on X displayed on a phone screen and representation of … [+] Dogecoin cryptocurrency are seen in this illustration photo taken in Krakow, Poland on November 13, 2024. (Photo by Jakub Porzycki/NurPhoto via Getty Images)
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Combining the open-source code of Bitcoin and Litecoin, Dogecoin was launched in December 2013. The Shiba Inu became its mascot, solidifying Dogecoin’s identity as the internet’s friendliest cryptocurrency. Its design deliberately embraced the humorous side of internet culture, and this whimsy attracted a community of fans. What began as a joke turned into something much larger than its creators ever expected.
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Why Is Dogecoin Important?
I love Pepsi’s mantra. The traditional idea of “brand” is out and “culture” is on target. In today’s fragmented media landscape, culture has become more important than brand as consumers increasingly seek personal connections and emotional resonance. Traditional advertising struggles to cut through the noise, making cultural relevance a critical strategy for brands aiming to engage audiences.
By aligning with cultural moments, movements, and experiences, companies can foster deeper emotional connections that go beyond product attributes. Younger consumers, in particular, value brands that reflect their values and participate meaningfully in their lives. Investing in cultural engagement not only strengthens brand equity but also drives long-term business performance, as it creates lasting relationships and keeps brands top of mind in an ever-evolving marketplace.
402614 01: Supermodel Cindy Crawford drinks a Pepsi in this undated company supplied photograph. … [+] Crawford will star in a new Diet Pepsi commercial during the 74th Annual Academy Awards airing March 24, 2002 on ABC-TV. The new Diet Pepsi spot updates an award-winning ad produced for regular Pepsi in 1991, in which a pair of awestruck boys watched Crawford approach a Pepsi vending machine. In the new commercial, titled “Two More Kids,” Crawford comes across a Diet Pepsi machine with sparkling new “bubbly blue” graphics at a dusty old country store while the song “Just One Look,” plays in the background. (Photo Courtesy of Pepsi/ Getty Images)
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Dogecoin’s importance lies not only in its status as a cultural phenomenon but also in its contributions to cryptocurrency adoption. Unlike Bitcoin, which has a fixed supply, Dogecoin has an unlimited supply, with over 140 billion coins in circulation as of 2024. This design keeps the currency inflationary, which many argue encourages its use for everyday transactions rather than HODLing as a store of value.
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Its simplicity and friendly branding made Dogecoin accessible to people who might otherwise be daunted by cryptocurrency. Over the years, Dogecoin has found a number of niches; most notably, it’s been embraced for charitable causes and community-driven projects.
In 2014, the Dogecoin community raised $50,000 to send the Jamaican bobsled team to the Winter Olympics. This nod to the smash-hit Disney film Cool Runnings is a brilliant summary of Dogecoin and its community: fun, light-hearted, generous – and committed to making positive change in the real world. Similarly, the Doge community raised money for talented rookie Nascar driver Josh Wise, after he struggled to attract traditional sponsorship. Other initiatives show Doge’s more serious side, such as efforts to raise money for clean water in Kenya.
KINGSTON, JAMAICA – MAY 2: The Jamaican national bobsleigh team represents Jamaica in international … [+] bobsledding competitions. The team first gained fame during their debut in the 1988 Winter Olympic Games. The team, consisting of Devon Harris, Dudley Stokes, Michael White, Freddy Powell, and last minute replacement Chris Stokes photographed May 2, 1991 on a beach in Kingston, Jamaica (Photo By Paul Harris/Getty Images)
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Projects like these are great examples of “decentralization” in action; they take a technical and – for many citizens – off-putting term and make it relevant to people’s lives in a way that’s both compelling and fun. No wonder than, in spite of its lighthearted origins, Doge has become a serious player in the market, consistently ranking among the top cryptocurrencies by market capitalization. Its loyal and growing community is a key factor in its longevity and relevance.
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What’s Elon Got to Do With It?
Elon Musk, the CEO of Tesla and SpaceX, has played a pivotal role in Dogecoin’s rise to mainstream attention. Musk’s fascination with the cryptocurrency began in 2019 when he humorously declared Dogecoin his favorite cryptocurrency. Since then, he has frequently tweeted about Dogecoin, causing significant price fluctuations.
Musk’s tweets range from memes to statements about its utility. For instance, he has referred to Dogecoin as “the People’s Crypto” and suggested that it could be used for practical purposes like payments. Musk’s influence reached new heights in 2021 when he announced that Tesla would accept Dogecoin as payment for select merchandise, adding credibility to its use as a transactional currency.
However, Musk’s involvement has not been without controversy. Critics argue that his tweets contribute to market volatility, while others see his support as a catalyst for innovation. Regardless of these debates, Musk’s endorsement has brought Dogecoin into the spotlight, attracting new users and increasing its adoption.
Who Are the Core Contributors of DogeCoin?
Dogecoin’s development has always been community-driven. After its initial launch, its creators, Markus and Palmer, stepped away from active development. For a time, this left the project without dedicated maintainers, but the community stepped in to keep it alive.
In recent years, the Dogecoin Foundation, initially established in 2014, has been revived to support the project’s long-term growth. The foundation includes prominent figures like Dogecoin Core developer Ross Nicoll and Vitalik Buterin, the co-founder of Ethereum, who serves as an advisor.
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The Dogecoin Foundation has also set up a development fund to reward contributors. In December 2022, the foundation allocated 5 million DOGE to this fund, ensuring that developers are incentivized to improve the network. This fund is overseen by core developers and community members, reflecting Dogecoin’s decentralized ethos.
UKRAINE – 2021/02/25: In this photo illustration a GitHub logo of a provider of Internet hosting for … [+] software development is seen on a smartphone screen. (Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)
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Contributors to Dogecoin Core have focused on enhancing its functionality and security. The project’s GitHub repository remains active, with developers collaborating to improve the network’s scalability and usability. This ongoing effort underscores the community’s dedication to Dogecoin’s future.
I’ll Pay With DogeCoin
One of Dogecoin’s most practical uses is as a payment method, thanks in large part to the development of services like Bitrefill. Bitrefill is a platform that allows users to purchase gift cards, top up mobile phones, and even pay bills using cryptocurrency, including Dogecoin. This service bridges the gap between the crypto world and traditional commerce, making it easier for Dogecoin holders to spend their coins.
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TOPSHOT – A technician inspects the backside of bitcoin mining at Bitfarms in Saint Hyacinthe, … [+] Quebec on March 19, 2018. – Bitcoin is a cryptocurrency and worldwide payment system. It is the first decentralized digital currency, as the system works based on the blockchain technology without a central bank or single administrator. (Photo by Lars Hagberg / AFP) (Photo by LARS HAGBERG/AFP via Getty Images)
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Through Bitrefill, Dogecoin can be used to pay for everyday expenses, from groceries to entertainment. This utility enhances Dogecoin’s appeal as a functional currency rather than just a speculative asset. As more platforms like Bitrefill integrate Dogecoin, its adoption as a medium of exchange is likely to grow.
Why Is Dogecoin Important?
Dogecoin’s importance extends beyond its playful branding and celebrity endorsements. It represents the democratization of cryptocurrency, showing that digital assets can be fun, inclusive, and widely adopted. Its community-driven ethos sets it apart from other cryptocurrencies, emphasizing collaboration and accessibility.
Moreover, Dogecoin’s real-world applications are expanding. From charitable initiatives to practical use cases like payments, Dogecoin demonstrates the versatility of blockchain technology. Its low transaction fees and active development make it a viable option for micropayments, a feature that could drive adoption in emerging markets. And actually micropayments are important for developed economies too. I know some writers who would love to see publishers allow per-article access rather than yearly subscriptions, and if we can finally crack micropayments it’ll be transformative for all economies.
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PARIS, FRANCE – NOVEMBER 12: In this photo illustration, a visual representation of the digital … [+] Cryptocurrency, Dogecoin (DOGE) is on display on November 12, 2024 in Paris, France. While Donald Trump’s presidential election victory has pushed the price of Bitcoin (BTC) to a new record, cryptocurrency is not the only one exploding. Dogecoin (DOGE) is on a stratospheric trajectory, driven by the possibility of Elon Musk’s arrival in government. (Photo illustration by Chesnot/Getty Images)
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Dogecoin’s story also challenges preconceived notions about what a cryptocurrency should be. While many projects focus on solving complex technical problems, Dogecoin’s success lies in its simplicity and relatability. This approach has inspired other projects to prioritize user experience and community engagement.
Where Do I Learn More?
While Dogecoin-specific conferences are rare, the cryptocurrency is often a topic of discussion at broader blockchain and crypto events. Dogecoin’s unique position as a community-driven project makes it a frequent subject in panels and workshops focused on decentralized finance and blockchain adoption.
Community meetups also play a significant role in Dogecoin’s ecosystem. Enthusiasts around the world organize events to share knowledge, celebrate milestones, and discuss developments. These gatherings highlight the community’s passion and its role in keeping Dogecoin relevant, and reflect the friendly, collaborative ethos of the currency itself
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Online forums and social media platforms like Reddit and Twitter serve as virtual meeting spaces for Dogecoin supporters. Subreddits like r/dogecoin are hubs of activity, where users discuss everything from price movements to charitable initiatives. This digital-first approach to community-building reflects Dogecoin’s origins in the best of internet culture.
More Than A Meme. It’s A Movement
Dogecoin is more than just a meme; it’s a movement. Its journey from a joke to a top cryptocurrency highlights the power of community, the influence of cultural icons like Elon Musk, and the potential for blockchain technology to reshape how we think about money. Whether you’re buying gift cards via Bitrefill, attending a meetup, or simply enjoying its whimsical charm, Dogecoin offers something for everyone.
As Dogecoin continues to evolve, its significance in the crypto world remains undeniable. It’s a testament to the idea that sometimes, the most impactful innovations start with a laugh. And in the case of Dogecoin, that laugh has united a global community and turned a Shiba Inu into a symbol of financial empowerment.
Buying Toncoin is a relatively straightforward process that can be completed in just a few steps:
Step 1: Choose a Cryptocurrency Exchange
The first step is to choose a reputable cryptocurrency exchange that lists Toncoin. Some popular exchanges that list Toncoin include Coinbase, Binance, and Kraken. Consider factors such as fees, security, and user interface when selecting an exchange.
Step 2: Sign Up and Verify Your Account
Once you’ve chosen an exchange, create an account by providing some basic information such as your name, email address, and password. You must also verify your identity through a know-your-customer (KYC) process, which typically involves uploading an image of a government-issued ID and a selfie.
Step 3: Deposit Funds
Next, deposit funds into your exchange account using a payment method accepted by the exchange, such as a bank transfer, card, or another cryptocurrency.
Step 4: Buy Toncoin
After depositing funds, navigate to the exchange’s trading platform and search for Toncoin (TON). Click “Buy” and enter the amount of Toncoin you want. You will need to decide whether to use a market order to buy instantly or a limit order to set the price at which you would like to buy it later. Review the transaction details and confirm the purchase.
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Step 5: Store Your Toncoin
Finally, transfer your Toncoin to a secure wallet to store your coins safely. While many people opt to keep their cryptocurrencies on the exchange they used to buy them, this isn’t always the safest way to store them as it requires trusting a third party to look after your assets. Instead, you can use a self-custody wallet to store your assets, which is generally safer if set up correctly.
Now you have successfully purchased TON, remember to stay up to date on the latest news and project developments so you can manage your investment effectively. As with any investment, it’s essential to always do your research, set a budget, and only invest what you can afford to lose.
This article is not an endorsement of any particular cryptocurrency, broker or exchange nor does it constitute a recommendation of cryptocurrency or CFDs as an investment class. Cryptocurrency is unregulated in Australia and your capital is at risk. Trading in contracts for difference (CFDs) is riskier than conventional share trading, not suitable for the majority of investors, and includes the potential for partial or total loss of capital. You should always consider whether you can afford to lose your money before deciding to trade in CFDs or cryptocurrency, and seek advice from an authorised financial advisor.
Donald Trump was viewed as the more pro-cryptocurrency presidential candidate in the 2024 election and his support for crypto could get another push with a report that his media company is acquiring a cryptocurrency trading company.
What Happened: Shares of Bakkt HoldingsBKKT are soaring Monday on reports the cryptocurrency company, which went public in October 2021 via SPAC merger, is being acquired by Trump Media & Technology Group DJT.
The media company co-founded by Trump, which owns the Truth Social platform, is in advanced talks to acquire Bakkt, according to the Financial Times. The report said Trump Media & Technology Group would acquire the cryptocurrency company, which is backed by Intercontinental ExchangeICE, in an all-share deal.
Benzinga reached out to Trump Media & Technology Group for comment on the report and will update the story accordingly. Benzinga has also contacted Bakkt for comment.
Bakkt’s first CEO was Kelly Loeffler, who was previously a member of the U.S. Senate, representing the state of Georgia as a Republican. Loeffler is helping to organize Trump’s inauguration in January and has close ties to the president-elect.
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The Intercontinental Exchange, which owns the New York Stock Exchange, owns a reported 55% of Bakkt. The exchange company would have to give approval to any such sale to the Trump media company.
Did You Know?
Why It’s Important: Bakkt said in June it was exploring strategic alternatives that could include a sale or breakup of the company.
The company previously said its crypto custody business could be wound down. This segment might not be included in the buyout, according to the report. Bakkt is planning to build a crypto trading platform geared to institutional investors.
DJT shares have experienced high volatility and an increased valuation after Trump won the 2024 election.
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Trump’s pro-crypto stance may have helped elevate Bitcoin BTC/USD and other cryptocurrencies to all-time highs following his 2024 election win.
An acquisition of Bakkt would push Trump’s media company and the president-elect deeper into the cryptocurrency sector, which comes after he promoted a crypto venture called World Liberty Financial with business partners.
BKKT, DJT Price Action: Bakkt stock was halted several times after the report and ended Monday’s session 163.04% higher at $29.71 versus a 52-week trading range of $5.57 to $68.75. Bakkt shares are down 44% year-to-date in 2024.
Trump Media & Technology stock is up 16.65% to $32.78 Monday versus a 52-week trading range of $22.55 to $79.38. Trump Media & Technology stock is up 85% year-to-date in 2024.
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