- A federal judge’s recent rejection has sent shockwaves through the community.
- The case has revolved around the classification of cryptocurrencies as securities.
- Ripple’s Chief Legal Officer has taken to X to dispel confusion.
In a development that has sent ripples of uncertainty through the cryptocurrency community, Federal Judge Jed Rakoff recently rejected TerraForm Labs’s attempt to use Judge Torres’s decision in the Ripple case as a basis for dismissing the U.S. Securities and Exchange Commission’s (SEC) lawsuit against the company and its founder, Do Kwon.
Ripple’s Legal Victory Questioned After Judge Rakoff’s Ruling
To provide context, Judge Torres previously made a distinction concerning how Ripple sold XRP to investors. Torres’s ruling classified Ripple’s XRP sales to institutional investors as securities, while programmatic sales on digital exchanges were not considered securities.
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Interestingly, TerraForm Labs seized Judge Torres’ ruling as a legal precedent to dismiss the SEC’s case against them. However, the SEC responded with a countermotion, asserting that Judge Torres’s ruling contained errors. Subsequently, Judge Rakoff’s rejection of Judge Torres’s ruling has raised questions about Ripple’s legal triumph.
Ripple’s Legal Chief Addresses Judge Rakoff’s Ruling
Judge Rakoff’s argument revolves around not differentiating cryptocurrencies based on their method of sale. This decision has stirred confusion in the market, prompting Ripple’s Chief Legal Officer, Stuart Alderoty, to step in and offer clarity.
Alderoty took to X, previously known as Twitter, to state that Judge Rakoff’s ruling does not alter the fact that XRP is not classified as a security.
He further emphasized that the TerraForm Labs’ case is still in its early stages, suggesting that the judge overseeing the case will likely consider the SEC’s allegations true. Moreover, Alderoty pointed out that Judge Torres only issued her decision in the Ripple lawsuit after a comprehensive factual record, spanning over two years, was presented in court.
On the Flipside
- The case may serve as a test for future cryptocurrency-related litigation, making it a focal point for regulatory discussions in the future.
- The outcome could have far-reaching implications on the broader landscape of digital assets and their regulatory oversight.
Why This Matters
Judge Rakoff’s rejection of TerraForm Labs’s approach adds a new layer of complexity to the ongoing SEC versus Ripple lawsuit, leaving the crypto community with lingering uncertainties. The implications of this ruling extend beyond Ripple’s immediate legal victory, prompting stakeholders to question the criteria for classifying cryptocurrencies as securities.
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To learn more about the transformative power of cryptocurrencies in reshaping the movement of money, read here:
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