A judgement that has been considered as a huge blow for the regulator in its quest to govern cryptocurrency markets was handed down on Tuesday by a federal judge who declined to let the United States Securities and Exchange Commission appeal her recent decision regarding Ripple Labs. The court made the decision.
Because purchasers did not expect a reasonable profit expectation based on Ripple’s efforts, U.S. District Judge Analisa Torres in Manhattan found on July 13 that the sale of Ripple’s XRP digital token on public exchanges complied with federal securities laws. This judgment was issued in her opinion that was handed down on that day.
The Securities and Exchange Commission (SEC) had requested permission to appeal Torres’ conclusions about “programmatic” sales of XRP and regarding “other distributions” of XRP as a source of payment for services. The SEC said that an appeal would be crucial to a “large number” of pending legal cases.
However, the judge did not think that an appeal would meaningfully move the matter toward a resolution and determined that there was no “substantial ground for difference of opinion” concerning her conclusions.
She also stated that her judgment did not conflict with a finding made on July 31 by U.S. District Judge Jed Rakoff in Manhattan. In that opinion, the judge stated that the SEC had a “plausible claim” that Terraform Labs’ Terra USD token constituted security when offered on public exchanges. She noted that her decision did not contradict that ruling.
Torres stated that Rakoff had been thinking about Terraform’s move to dismiss the SEC action and was obligated to accept any reasonable conclusions favoring the regulator.
It has been decided that the Ripple case will go to trial on April 23, 2024.
The Securities and Exchange Commission did not respond instantly to requests for comment made after market hours. Attorneys for Ripple, including Chief Executive Brad Garlinghouse and co-founder Chris Larsen, did not immediately reply to demands for the same information.
Ripple was charged by the Securities and Exchange Commission (SEC) in a complaint filed in December 2020 of fraudulently raising over $1.3 billion in an unregistered securities offering by selling XRP.
The Securities and Exchange Commission (SEC) has maintained for a long time that many digital assets are securities, in the same vein as stocks and bonds and that it has the authority to regulate them.
Its other lawsuits include those filed against Binance, the platform with the title of largest cryptocurrency exchange in the world, and Coinbase (COIN.O). This platform is the largest cryptocurrency exchange in the United States. In July, Torres concluded that only a subset of XRP transactions broke the federal securities laws.
Case number 20-10832 is being heard in the United States District Court for the Southern District of New York between the Securities and Exchange Commission and Ripple Labs, Inc.
