Hidden Mistake In XRP Ruling?: Will Judge Torres Review It
Crypto News: While the XRP lawsuit Summary Judgment paved way for unraveling potential in the United States, there are many facets to the ruling that require further scrutiny. Earlier in July 2023, Judge Analisa Torres ruled that the sale of Ripple’s XRP token does not constitute illegal securities sales, as was alleged by the U.S. Securities and Exchange Commission (SEC). Judge Torres ruled that sale of the tokens to retail buyers do not amount to securities while the sale to institutional buyers remain security sales.
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Meanwhile, Southern District of New York Judge Jed Rakoff contested Judge Torres’ verdict by allowing the SEC to proceed with its lawsuit against Terraform Labs and founder Do Kwon. This essentially meant that Judge Rakoff rejected the ruling that retail token sales are not securities. In a latest, attorney Bill Morgan raised the question of the Ripple on-demand liquidity (ODL) linked sales, which was earlier flagged by the company’s chief technology officer David Schwartz.
XRP ODL Sales: Securities Or Not?
The attorney wondered if the ODL sales can be justified as securities, even if the institutional clients hold the XRP tokens for mere seconds. The Ripple ODL transactions involve customers holding XRP for a few seconds to facilitate quick cross-border payments. This means it is used just as a means for payments and does not necessarily involve the tokens as an investment. Attorney Morgan said,
“Still waiting for the day someone in the XRP community justifies the Torres decision for lumping sales to ODL customers with institutional sales on any reasoning consistent with Howey principles.”
Meanwhile, the XRP price has been on a steady decline in the last seven days, dropping from the highs it reached following the Summary Judgment.
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