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Prominent legal expert Fred Rispoli highlights a major concern regarding XRP legal status, suggesting that the coin could be deemed a security in California but not New York.
Attorney Rispoli issued this opinion while reacting to the recent ruling in the Zakinov civil securities lawsuit against Ripple. The case, which alleged that Ripple CEO Brad Garlinghouse violated securities laws via XRP offering in 2017, received a summary judgment decision yesterday.
Court Dismisses 4 Charges Against Ripple But Sends 1 to Jury
In the latest ruling, Judge Phyllis Hamilton tossed out four claims against Ripple, including the company’s failure to register with the SEC. However, she held that a jury would decide the case regarding whether Ripple offered and sold XRP as a security.
Notably, Ripple’s counsel urged Judge Hamilton to follow the reasoning of Judge Analisa Torres in the SEC lawsuit, which held that the company’s programmatic sales of XRP on digital exchanges do not constitute securities.
Judge Torres held that programmatic buyers of XRP had no expectations of making profits directly from Ripple’s efforts. This premise represents one of the prongs of the Howey test, which determines whether a transaction constitutes a security.
Judges Reject Torres’ Reasoning
Judge Hamilton did not adopt this reasoning, emphasizing that the case is a matter of law that a jury would decide. This is not the first time a U.S. District Judge disagreed with Judge Torres’ reasoning. Last year, the ruling judge in the SEC v. Terra lawsuit rejected the logic behind Judge Torres’ verdict.
Notably, Attorney Rispoli urged crypto enthusiasts to advocate for federal legislation following the latest disagreement with Judge Torres’ logic. He pointed out that while XRP is deemed a non-security in New York, the coin could be classed as a security in California.
Therefore, federal legislation is imperative to provide clarity and uniformity across different jurisdictions regarding the regulatory status of crypto assets, including XRP.
Ultimately, crypto world needs to keep pressure on getting federal legislation, because we are on track to having $XRP be a security in California but not in New York. 4/4
— Fred Rispoli (@freddyriz) June 20, 2024
In the meantime, Ripple’s CLO Stuart Alderoty believes Judge Torres’ reasoning remains valid despite the recent ruling in the Zakinov case.
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