Ripple Legal Chief Dispels Concerns Over XRP's Status Amid Terra Ruling
Ripple Chief Legal Officer Stuart Alderoty has emphatically clarified that the recent ruling in the Securities and Exchange Commission’s (SEC) case against Terraform Labs has no bearing on XRP’s classification as a security. The assertion comes as a response to speculations that the SEC's legal victory against Terraform Labs could potentially impact XRP's regulatory status. The legal saga involves Judge Jed Rakoff's decision to permit the SEC to move forward with its case against Terraform Labs, which differed from Judge Analisa Torres's stance on XRP's security classification in relation to secondary market sales. Judge Torres had contended that the programmatic sales of XRP did not fall under the category of securities offering. Nevertheless, she ruled that sales of XRP to institutional buyers did meet the criteria for a securities transaction. In contrast, Judge Rakoff's ruling indicated that the Howey test, a legal test to determine whether a transaction involves an investment contract, should not discriminate between various buyers of an asset. He argued that coins sold directly to institutional investors should be treated similarly to those sold to retail investors through secondary market transactions. Judge Rakoff's perspective raises concerns among some crypto enthusiasts who fear potential repercussions for XRP's regulatory standing. Despite these worries, Ripple's Chief Legal Officer remains steadfast in asserting that Judge Rakoff's interpretation overlooks the nuanced rationale underlying the XRP decision. Alderoty highlighted that the SEC-Terra case was still in its early stages, and Judge Rakoff's initial inclinations might be influenced by the SEC's allegations. He emphasized that the determination regarding XRP came after an extensive factual analysis spanning over two years, which was meticulously presented to the court. Crypto attorney John Deaton echoes Alderoty's stance, emphasizing that Judge Rakoff's ruling was based on a Motion to Dismiss, unlike Judge Torres's comprehensive evaluation of the Howey factors in the XRP case. On the opposing side, skeptics like former SEC official John Reed Stark interpret Judge Rakoff's decision as a potential indication of mounting challenges for Ripple's legal position regarding XRP. In conclusion, Ripple's Chief Legal Officer dismisses concerns about XRP's status following the Terra ruling. The divergence of judicial opinions and interpretations underscores the complexity of regulatory considerations within the cryptocurrency landscape. As legal battles continue to shape the industry's future, stakeholders and enthusiasts await further clarity on the regulatory framework governing digital assets like XRP.