Judge Rakoff Rejects Approach in Ripple Case Over XRP
Judge Jed S. Rakoff of the United States District Court for the Southern District of New York (SDNY) disagrees with the approach taken by District Judge Analisa Torres in the SEC v. Ripple case concerning XRP.
- Judge Rakoff disagrees with Judge Torres’s reasoning in the Ripple case.
- The SEC plans to appeal the Ripple decision.
- Judge Rakoff rejects the distinction between coins sold directly to institutional investors and those sold through secondary market transactions to retail investors.
- Former SEC enforcement chief John Reed Stark believes the Ripple ruling is in trouble.
- Judge Torres’ ruling on XRP still has supporters.
Justin Browder, a partner in Willkie’s Asset Management Department, points out that Judge Rakoff’s opinion in the Terra case is not a complete departure from the Ripple holding. While he agrees with the premise that tokens themselves are not investment contracts, the application of the Howey test yields a different result in Terra than in Ripple.
Hot Take
The SEC’s case against Ripple and the subsequent rulings have generated significant debate within the crypto community. Judge Rakoff’s rejection of Judge Torres’s approach further highlights the disagreement and uncertainty surrounding the classification of cryptocurrencies. It remains to be seen how these legal battles will ultimately shape the regulation and future of the crypto industry.
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