Ripple’s CLO Asserts XRP Not A Security Amidst Confusing Ruling
- Ripple’s Chief Legal Officer, Stuart Alderoty, asserts that the recent ruling in the TerraForm Labs case does not change XRP’s status as a non-security asset.
- US District Judge Jed Rakoff rejects TerraForm Labs’ attempt to use Judge Torres’ ruling in the Ripple case as a precedent, causing confusion in the market.
- The company also strengthens its legal defense by hiring former SDNY attorney Douglas Samuel Zolkind.
In the wake of a recent ruling in the TerraForm Labs case, Ripple’s Chief Legal Officer, Stuart Alderoty, has stepped in to clarify that the ruling does not alter the fact that XRP is not considered a security.
The confusion arose when US District Judge Jed Rakoff rejected TerraForm Labs’ attempt to use Judge Torres’ decision in the Ripple case as a precedent to dismiss the US Securities and Exchange Commission’s (SEC) lawsuit against their company and its founder, Do Kwon.
This ruling sparked uncertainty in the market, prompting Alderoty to provide much-needed clarity. He emphasized that Judge Rakoff’s decision does not alter the established fact that XRP is not a security.
“I’ll let others dive into the Terra Judge’s comment, including his apparent misreading of the Ripple Judge’s reasoning – ex: missing the point that secondary market traders can’t “invest money” in anyone or anything if they don’t know who they are buying from,” Alderoty said.
To provide context, Judge Torres had previously drawn a distinction in the Ripple case based on how XRP was sold to investors. She determined that Ripple’s sales of XRP to institutional investors could be classified as securities, while the company’s programmatic sales on digital exchanges were not subject to the same classification. TerraForm Labs attempted to leverage this ruling in their defense against the SEC’s lawsuit, but the SEC countered that Judge Torres had made errors in her judgment.
Judge Rakoff’s rejection of Judge Torres’ ruling has raised questions about the previous victory Ripple achieved in the case. He asserted that cryptocurrencies should not be differentiated based on the manner of their sale.
In a related development, Ripple has bolstered its legal team by hiring former SDNY attorney Douglas Samuel Zolkind. He will be joining their legal defense against the SEC. Zolkind’s expertise in white-collar criminal defense and government investigations is expected to strengthen Ripple’s position in the ongoing legal battle.
The SEC is currently considering filing an appeal against Judge Torres’ summary judgment ruling. Despite this, Magistrate Judge Sarah Netburn has ordered Ripple and the SEC to negotiate and agree on potential settlement dates for other matters related to the sale of XRP to institutional investors. While the SEC hints at a possible appeal, XRP lawyers are challenging the SEC’s arguments and the likelihood of such an appeal.
Meanwhile, the XRP community is buzzing with excitement over the potential for a rally in the price of XRP, attributed to the formation of a pennant pattern. However, there is also a risk of a correction phase if the market continues to exhibit weakness.
The legal battle between Ripple and the SEC continues to draw attention, and the involvement of legal expert Douglas Samuel Zolkind may play a crucial role in determining the outcome of the case. As the situation evolves, the market will closely monitor any further developments in this high-stakes dispute.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.