Here at Coffee & Crypto, we’re dug in for the long war against the SEC. And we’re not firing until we can see the FUD in their eyes.

We don’t have black-and-white pocket portraits of your small-town sweethearts, but we have something else to raise your spirits.

Crypto won a crucial victory last week when a federal judge declared that Ripple’s XRP token sales didn’t qualify as pushing unregistered securities.

The market has reacted and XRP has been moving and grooving.

But can crypto ride this new precedent to the heights of U.S. economic legitimacy?

A Word Foam Our Sponsor

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Espresso Shots

☕️ Simplifying the Crypto Wallet 👛 🪙

Vitalik Buterin, the founder of Ethereum, intends to make crypto wallets as easy to use as email accounts.

That entails a process called “account abstraction” which would allow seed phrases to be stored in smart contracts. This would involve switching crypto wallets from being externally owned to smart-contract-based.

This practice could make crypto wallets more user-friendly than ever, ideally enabling users to recover their private seed phrases in a process as simple as creating a new password for an email account.

Though unfortunately if the wallets become too easy to use, my grandma will get one. And then I’ll be getting messages like “FWD this crypto to ten grandchildren or god will smite you.”

☕️ Ubisoft Joins the Cronos Blockchain 🔗 🎮

Gaming giant Ubisoft will now support the Cronos network according to a statement released on July 18.

This represents Ubisoft’s latest foray into Web3 gaming, though the company has already released several crypto games and has supported several NFT and Web3 gaming startups through the company’s Entrepreneurs Lab Programs.

While Ubisoft faced serious criticism in 2021 for its implementation of NFTs in its Ghost Recon franchise.

As for the partnership with Cronos, not much will change for users already on the blockchain.

Though they may receive the message:

This blockchain was inspired by historical events and characters. This work of fiction was designed, developed, and produced by a multicultural team of various beliefs, sexual orientations, and gender identities.

Before being sent to assassinate historical figures.

☕️ MI6 Criticizes AI ❌ 🤖

The British intelligence agency MI6 says it doesn't believe AI will replace human spies.

Sir Richard Moore, head of MI6, gave an impassioned speech in Prague addressing both the Russian invasion of Ukraine and AI’s potential to make human spycraft obsolete.

“The unique characteristics of human agents in the right places will become still more significant. They are never just passive collectors of information: our agents can be tasked and directed,” said Moore, in defense of the impact of human vs. artificial agents. “T[]hey can identify new questions we didn’t know to ask; and sometimes they can influence decisions inside a government or terrorist group.”

“Human intelligence in the age of Artificial Intelligence will increasingly be defined as those things that machines cannot do,” Moore continued.

But if AI has any hope of ever replacing human MI6 agents, it better learn how to guzzle seven martinis and still somehow stumble into a supervillain’s lair.

Spilling the Beans

Ripple’s Rallying Cry 🪙 📣

One question has remained at the forefront of every discussion of American crypto regulation:

Is crypto a security?

There are many in either camp, but last week, Judge Analisa Torres ruled that Ripple didn’t violate securities laws in the sale of $1.4 billion of its native XRP token.

However, the ruling came with a major caveat: Torres also decided that Ripple did violate securities laws in regard to its institutional contracts.

These contracts amounted to $728 million in transactions between Ripple and more experienced investors and institutions.

Torres decided that these written contracts passed the Howey Test, a 1933 precedent based on investment contracts that determines whether or not an investment contract constitutes the sale of a security.

But even without an entirely clean break, the decision to not classify XRP as a security represents a major win for crypto.

And the markets took notice, sending XRP into a 60% surge since the ruling.

While many would say that the markets should decide America’s outlook on crypto, they just don’t. But if they did, much would change, since the crypto market currently represents a trillion-dollar sector that is mostly untapped by American industry.

If anything, this decision should create a new precedent. The decision that XRP isn’t a security should create a Ripple (sorry) effect, and move things along in every SEC lawsuit.

Wasn’t this the regulatory clarity we were all waiting for?

But that doesn’t seem to be happening. Why?

Well, the SEC isn’t giving up any ground. Despite this landmark case, if it were up to them, every crypto would be classified as a security except Bitcoin. Maybe Ethereum.

SEC Chairman Gary Gensler has even gone on record to say that the SEC would continue to fight their securities war.

Gensler said he was “disappointed” with the Ripple ruling and that the SEC is “looking at it and assessing that option,” regarding a legal appeal challenging the ruling.

But the Ripple ruling has made one thing very clear: the SEC is not the be-all and end-all of crypto decisions.

“What Ripple did is mark the end of a stage in crypto [of] this idea that the SEC could by itself resolve the hard questions of crypto,” said former SEC member Justin Slaughter, in an interview with Politico. “For those of us who have studied this carefully, the cracks in this approach were apparent from the start. It was a house built on a bad foundation, but, now, I think it’s apparent to everybody.”

Nevertheless, the SEC will dig its feet in, even as rulings like Ripple continually undermine its authority.

It may continue to be a case-to-case basis, and will most certainly be an uphill battle for crypto, but, as Ripple proved, it’s a battle we can win.

We feel pretty secure in that belief. And that security is not unregistered.

Premium Alpha

Meme of the Day

“Q, this AI in the car. Is it programmed for martinis?”

Crypto 101

EOA: This acronym stands for “Externally Owned Account” and is the primary type of crypto wallet.

In an EOA, the user has a unique privacy key used to recover and/or access their funds.

EOAs cannot access leveraged account abstraction like a smart-contract-based wallet. A smart-contract-based wallet can access more complex functions, but EOAs are still decidedly more popular.

As we mentioned in our top espresso shot, Vitalik Buterin would like to change that by making smart contract wallets easier to use.

The Last Sip

The Head of MI6 took the time to address the agency’s fears that AI might replace human agents. But they shouldn’t be worrying about AI, they should be worrying about:

3. Spy Kids. You don’t have to pay them as much as adult spies. Yes, the operations will be slowed down by the mandatory child labor guidelines, but they’re small and can fit into places regular spies can’t. They also speak Spanish.

2. British Dockworkers. They can work longer and in cold weather. And if anything catastrophically bad happens to them, they’ll just be like, “well, that’s all that then innit?”

1. Agent Cody Banks

Stay Caffeinated,

Coffee & Crypto Team

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