- Ripple’s Chief Legal Officer Stuart Alderoty has stated that the Terra judge’s recent ruling doesn’t affect XRP.
- The judge overseeing the SEC’s case against Terra recently rejected a previous ruling regarding Ripple and XRP.
- Alderoty clarified that the judge’s comment about Ripple was unnecessary and non-binding.
Stuart Alderoty, the Chief Legal Officer at Ripple, believes that the recent ruling by the judge overseeing the SEC’s fraud lawsuit against Terraform Labs and its founder Do Kwon, has no impact on a previous ruling by a Manhattan judge regarding the non-security status of XRP in SEC vs. Ripple.
Alderoty took to Twitter earlier today to share his thoughts on the recent ruling by Judge Jed Rakoff who recently heard arguments in the Securities and Exchange Commission’s lawsuit against Terra and Kwon. Judge Rakoff allowed the securities regulator to proceed with its charges, but in doing so rejected a previous ruling by fellow New York Judge Analisa Torres.
Judge Torres had previously ruled that the XRP sold to retail customers on secondary markets did not qualify as an investment contract and thus were not securities. This precedent was cited by Do Kwon’s lawyers, who filed a motion to dismiss the SEC’s lawsuit on similar grounds. However, Judge Rakoff denied the motion to dismiss.
Following the split ruling by two different judges, the crypto community expressed concerns about the precedent set by Judge Torres’ XRP ruling. However, Alderoty told his followers today that the XRP ruling would prevail. “Let me be clear about some confusion going around – the ruling in the Terra case changes NOTHING about the Ripple ruling that XRP is not a security,” he added.
The Ripple lawyer cited the controversial Howey test and emphasized the lack of arrangement between contracting parties for the existence of an investment record in the case of Ripple. The contracting parties element is one of the cornerstones of the Howey Test, which has historically been used by the SEC to determine if an asset qualifies as a security.
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