Ripple CLO Highlights Importance of Binance Ruling, Backs Judge Torres’ Decision on XRP
Stuart Alderoty, Ripple’s Chief Legal Officer, has praised Judge Analisa Torres for correctly ruling that XRP itself is not classified as a security. In a recent statement, he asserted that other U.S. courts are now adopting her decision due to its alignment with established securities laws, particularly referencing the Howey framework.
Alderoty included a passage from the SEC v. Binance ruling, demonstrating how the court recognized Judge Torres’ decision as ‘consistent with the law of the land.’ The order, issued by Judge Amy Berman Jackson on June 28, stated:
“The Court is inclined to agree with the approach of the court in Ripple Labs since the ‘it-is-what-it-is’ approach of the SEC appears to be inconsistent with the clear Supreme Court directives quoted in its pleading.”
Additionally, Alderoty commented that despite the SEC’s attempts to complicate established securities laws with inconsistent legal theories, courts are increasingly seeing through the regulator, as evidenced in the Binance lawsuit ruling.
Binance Judge Refers to Ripple Decision in Dismissing SEC’s BNB Secondary Market Claims
In the much-awaited SEC v. Binance decision issued last Friday by Judge Jackson, claims regarding anti-fraud violations, sales of BNB post-ICO, and failure to register with the SEC will proceed. However, charges related to Binance’s Simple Earn and secondary market sales of BNB and BUSD were dismissed. Notably, Judge Jackson cited the Ripple decision in dismissing charges concerning Binance’s secondary market sales of BNB and BUSD.
It’s worth recalling that Judge Torres’ pivotal decision last year concluded that Ripple’s programmatic sales of XRP on digital exchanges do not constitute investment contracts. In contrast, Judge Jed Rakoff disagreed with Torres’ rationale in the SEC v. Terraform Labs case. Nevertheless, the recent Binance decision is heralded as a ‘significant victory for clarity regarding secondary market sales of digital assets,’ according to FOX Business reporter Eleanor Terrett.
Ripple CLO Emphasizes Significance of Binance Decision
In a subsequent post, Alderoty underscored the importance of the Binance ruling, highlighting how it addresses market uncertainties stemming from William Hinman’s controversial 2018 speech. In that speech, Hinman designated Ethereum (ETH) as a non-security, citing its decentralized structure.
Alderoty characterized Hinman’s assertions as akin to a fairy tale, suggesting that a token could magically transform between being a security and a non-security. He pointed out that SEC attorneys had reservations about Hinman’s reasoning prior to the speech, cautioning that such a declaration would sow confusion in the markets. The Ripple CLO asserted that the recent Binance ruling further rebuts Hinman’s notion that a token can oscillate between security and non-security status.
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