In the ongoing legal battle between the U.S. Securities and Exchange Commission (SEC) and Ripple Labs over the classification of XRP as a security, a potential hidden mistake in the ruling has come to light. It is clear that the XRP lawsuit verdict has opened up new possibilities in the United States, but there are still lingering questions.
XRP Ruling Reexamined: Will Judge Torres Revise the Decision?
It is clear that the XRP lawsuit verdict has opened up new possibilities in the United States, but there are still lingering questions.
In July 2023, Judge Analisa Torres declared that Ripple’s XRP token sales were not illegal securities transactions, except when sold to institutional buyers. However, Southern District of New York Judge Jed Rakoff’s decision to allow the SEC to proceed with its lawsuit against Terraform Labs and founder Do Kwon has brought the ruling into question.
This has led attorney Bill Morgan to raise concerns about Ripple’s on-demand liquidity (ODL) linked sales, which was previously highlighted by the company’s CTO, David Schwartz. Now, Judge Torres is set to review the controversial verdict, bringing new hope for clarification on XRP’s regulatory status in the United States.
XRP ODL Sales: A Securities Dilemma? Attorney Questions Howey’s Principles
As the XRP lawsuit’s aftermath continues, attorney Bill Morgan raises questions about the classification of Ripple’s on-demand liquidity (ODL) sales as securities. The attorney wonders if ODL sales, involving institutional clients briefly holding XRP tokens for cross-border payments, can be considered securities under Howey principles.
The Ripple ODL transactions are primarily utilized for quick payments and not as an investment vehicle, leading to uncertainty regarding their regulatory status. With the XRP price facing a steady decline in recent days, the debate surrounding its legal classification adds further complexity to the cryptocurrency’s future.
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