Renowned legal expert Fred Rispoli has raised a significant concern about the legal status of XRP, suggesting that the coin may be classified as a security in California but not in New York. This was expressed by attorney Rispoli in response to the recent judgment in the Zakin civil securities lawsuit against Ripple.
The lawsuit, which accused Ripple CEO Brad Garlinghouse violating securities laws through the 2017 XRP offering, received a summary judgment decision. In this latest ruling, Judge Phyllis Hamilton dismissed four claims against Ripple, including the company’s failure to register with the SEC., she determined that a jury decide whether Ripple offered and sold XRP as a security.
It is noteworthy that Ripple’s counsel urged Judge Hamilton to consider Judge Analisa Torres’ reasoning in the SEC lawsuit, which concluded that the company’s programmatic sales of XRP on digital exchanges do not constitute securities. Judge Torres held that programmatic buyers of XRP had expectations of making profits directly from Ripple’s efforts—a key aspect evaluated by the Howey to determine whether a transaction constitutes a security.
Judge Hamilton did not adopt this reasoning and emphasized that it is for a jury to decide. This dissent with Judge Torres’ logic is consistent with another U.S. District Judge’s rejection last year in unrelated litigation.
Attorneypoli called for federal legislation following this disagreement regarding XRP’s regulatory status across different jurisdictions. He noted contrasting classifications between New York and California and stressed federal legislation is crucial for clarity and uniformity regarding crypto asset regulations.
Meanwhile, Ripple’s CLO Stuart Alderoty maintains his belief in Judge Torres reasoning despite these developments.
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