Stuart Alderoty, the Chief Legal Officer of Ripple, has clarified that a recent ruling in the TerraForm Labs’ case does not alter the fact that XRP is not a security. Responding to the widespread confusion surrounding the ruling, Alderoty took to Twitter to address the matter.
The ruling in question involves the lawsuit between the Securities and Exchange Commission (SEC) and TerraForm Labs. US District Judge Jed Rakoff rejected TerraForm Labs’ attempt to use Judge Torres’ decision in the Ripple case as a precedent to dismiss the SEC’s lawsuit against the company and its founder, Do Kwon.
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It is worth noting that Judge Torres had differentiated how Ripple sold XRP to investors in her ruling. She determined that Ripple’s sales of XRP to institutional investors were classified as securities. However, she ruled that the company’s programmatic sales on digital exchanges did not fall under the securities category.
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TerraForm Labs seized on Judge Torres’ ruling, employing it as a legal precedent to dismiss the SEC’s case. However, the SEC countered by filing a motion claiming that Judge Torres had erred in her ruling. Judge Rakoff subsequently rejected Judge Torres’ decision, which raised questions about Ripple’s previous victory.
Judge Rakoff emphasized that cryptocurrencies should not be distinguished based on how they are sold. The decision has stirred confusion in the market, prompting Alderoty to provide clarity. In his tweet, Alderoty asserted that Judge Rakoff’s ruling does not alter the fact that XRP is not considered a security.
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Alderoty further expounded that the TerraForm Labs’ case is still in its early stages, indicating that the judge presiding over the case will likely accept the SEC’s allegations as true. He also highlighted that Judge Torres issued her decision in the Ripple lawsuit after a comprehensive factual record, developed over a span of two years, was presented in court.
Stuart Alderoty noted:
“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.
“Also, the Terra case is just starting and that Judge has to accept everything that the SEC alleges as true (for now). Our ruling came after a full factual record (developed over 2+ years) was presented to the Court.”
To foster a diverse range of perspectives, Ripple’s chief legal officer encouraged other legal experts to analyze Judge Rakoff’s comment on the Ripple ruling.
“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.”
Renowned lawyer Jeremy Hogan has already expressed his intention to provide his insights, announcing plans to create a video explaining the latest developments.
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