Terra Vs US SEC: Coinbase CLO, XRP Attorneys Respond As SEC Denies Torres Doctrine

The US Securities and Exchange Commission (SEC) on Friday responded to Terraform Labs and Do Kwon’s motion to dismiss the lawsuit based on Judge Torres’ summary judgment ruling in the US SEC v. Ripple Labs case. Coinbase chief legal officer Paul Grewal and pro-XRP attorneys reacted to the SEC’s contradicting decision in the XRP lawsuit.

US SEC Denies Commonality Of Ripple Ruling In Terra Case

According to a filing in the District Court for the Southern District of New York on July 21, the US SEC contradicts Judge Analisa Torres’ summary judgment ruling in the Ripple lawsuit. Moreover, SEC will appeal against the court’s ruling that XRP is a security, denying its relevance in Terraform and Do Kwon lawsuit.

SEC argues that institutional sales support the SEC’s arguments and programmatic sales decision is incorrect and should not be followed by the court. In addition, it reasons that the ruling can’t be squared with Howey and decades of federal securities laws jurisprudence.

“Those portions of Ripple were wrongly decided, and this Court should not follow them. SEC staff is considering the various available avenues for further review and intends to recommend that the SEC seek such review.”

Terra and Do Kwon lawyers filed a supplemental authority this week in support of the motion to dismiss the lawsuit by SEC. It claimed that Judge Torres’ ruling in the SEC v. Ripple lawsuit directly defendants’ motion to dismiss the lawsuit and justify that UST, LUNA, wLUNA, MIR, or mAssets are not investment contacts.

Also Read: US SEC Gives First Hint On Seeking XRP Ruling Appeal

Coinbase CLO And XRP Attorney’s Reactions

Paul Grewal, chief legal officer of Coinbase, noted that the SEC once more argues its approach to Howey over the XRP ruling. Billionaire Mark Cuban also replied to Grewal, saying that Ripple made it clear that not every buyer is an investor and blockchain data clearly indicates the utility of the token.

They also refer to every buyer as an investor in their filing. That's not the case and Ripple made that clear. Securities have one purpose, to be a security. For a DeFi or CEX buyer it's impossible to know why a buyer buys. But it is possible to look at the Blockchain and see…

— Mark Cuban (@mcuban) July 22, 2023

Pro-XRP attorneys John Deaton and others also respond to the SEC’s view that Ripple ruling is “incorrect” and will appeal against the court’s decision. Deaton said even if the SEC was successful appealing Judge Torres ruling, all that happens is a Remand. Judge Torres is likely to determine that the Securities and Exchange Commission failed to demonstrate the common enterprise factor between Ripple and XRP holders in the secondary market.

Also Read: Ripple Seeks Approval Of Licenses In UK And Ireland After XRP Win Against SEC