XRP Lawyer Weaponizes X Community Notes Against SEC Crypto Scam Alert

Kelvin Munene Murithi
August 31, 2024
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XRP Lawyer Weaponizes X Community Notes Against SEC Crypto Scam Alert

Highlights

  • The SEC faced criticism from XRP lawyer Fred Rispoli after warning about crypto scams on X.
  • Rispoli accused the SEC of misleading investors, highlighting ongoing tensions with the crypto industry.
  • The SEC's actions against major crypto firms, including a Wells Notice to OpenSea, raised concerns about stifling innovation.

A recent post by the U.S. Securities and Exchange Commission (SEC) on X (formerly Twitter) has sparked significant backlash from pro-XRP lawyer Fred Rispoli. The SEC reiterated its warning regarding crypto scams. However, Rispoli leveraged X community notes to counter the claim.

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XRP Lawyer Thrashes SEC’s Crypto Scam Warning

The SEC warning on X stated, “Scammers often use innovations and emerging technologies like #crypto to perpetrate investment scams,” urging caution among investors. The SEC’s post aligns with a May Investor Alert issued by its Office of Investor Education and Advocacy.

The alert warned of increasing crypto scam cases, where scammers exploit the popularity of digital assets to lure investors. The alert outlined five common tactics used by fraudsters, including establishing trust through social media and directing victims to fake investment platforms.

“Fraudsters Connect With You on Social Media Platforms or Through a Supposedly Accidental Text Message, and Then Gain Your Trust,” the alert stated, emphasizing the dangers of relationship-based scams, often referred to as “pig butchering scams.”

However, Rispoli quickly responded, requesting a review of the SEC’s post via X community notes. He accused the agency of misleading investors. He said, “The OP has scammed hundreds of thousands of investors into purchasing crypto given the agency’s all clear only to be rugged by the agency at a later date.”

This criticism highlights ongoing tensions between the SEC and the crypto industry. For context, the American watchdog allowed Coinbase to go public in 2021 but later crackdown on the exchange for alleged sale of securities.

The XRP lawyer’s response on the crypto scams warning reflects a growing disappointment amid legal actions against major firms such as Binance, Kraken, and Uniswap. These companies have faced scrutiny over alleged violations of securities laws. In these cases, the agency claims that many digital assets and trading platforms qualify as securities and should be regulated as such.

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OpenSea Wells Notice

In a recent high-profile case, the SEC issued a Wells Notice to OpenSea, a leading NFT marketplace. The regulatory body threatened to sue the platform for sale of NFTs, which it deems to be securities. This move has drawn parallels to past cases involving other crypto firms.

OpenSea CEO Devin Finzer expressed shock at the SEC’s stance, arguing that the regulator’s actions could stifle innovation in the digital collectibles space. Finzer pointed out that the SEC has now entered the “uncharted territory.” He also suggested that many artists and creators could be negatively impacted by these regulatory measures.

This aligns with Rispoli’s claim of the SEC being behind ‘crypto scams’ that affect investors owing to ambiguous regulation. Adding further complexity to the debate, Ripple CLO Stuart Alderoty referenced a 1976 SEC ruling. At the time, the agency clarified that art galleries promoting and selling artworks for “investment motive” were not required to register with the SEC.

Alderoty argued that this precedent could apply to NFTs, which, like traditional art, are traded as collectibles rather than securities. “Fun fact: In 1976, the SEC ruled that art galleries, even when promoting and selling to buyers that had investment motives, didn’t need to register with the SEC,” he noted.

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
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Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Kelvin Munene is a crypto and finance journalist with over 5 years of experience, offering in-depth market analysis and expert commentary . With a Bachelor's degree in Journalism and Actuarial Science from Mount Kenya University, Kelvin is known for his meticulous research and strong writing skills, particularly in cryptocurrency, blockchain, and financial markets. His work has been featured across top industry publications such as Coingape, Cryptobasic, MetaNews, Cryptotimes, Coinedition, TheCoinrepublic, Cryptotale, and Analytics Insight among others, where he consistently provides timely updates and insightful content. Kelvin’s focus lies in uncovering emerging trends in the crypto space, delivering factual and data-driven analyses that help readers make informed decisions. His expertise extends across market cycles, technological innovations, and regulatory shifts that shape the crypto landscape. Beyond his professional achievements, Kelvin has a passion for chess, traveling, and exploring new adventures.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.