Judge Torres decides: XRP is not a security - Ripple defeats the Sec

Judge Torres decides: XRP is not a security - Ripple defeats the Sec

Richter Torres is eagerly awaited

It was a monumental Thursday meeting with judge Torres and the Sec against Ripple Fall made headlines.

On Thursday, judge Torres issued the decisions about the applications to a summary judgment. Torres decided that XRP is not always a security, which is a blow for Gary Gensler and the regulatory campaign of the Sec.

A area of ​​interest of the judgment concerns the programmatic sale. Richter Torres found that Ripple XRP sold programmatically or via trading algorithms (the "programmatic sales") on stock exchanges for digital assets. Judge Torres added that the sales on stock exchanges for digital assets were blind BID letter transactions. Ripple didn't know who bought the XRP and the buyers didn't know who sold it.

In terms of programmatic sales, Richter Torres decided that “after examining the economic reality of the programmatic sales, the court concludes that the undisputed balance did not justify the third Howey approach. While the institutional buyers were reasonably expected that Ripple would use the capital received from his sales to improve the XRP ecosystem and thereby increase the price of XRP, Programmatic buyers could not reasonably expect the same. ”

Richter Torres continued: “In fact, the programmatic sales of Ripple were blind/Bid-ASK transactions, and the programmatic buyers could not know whether their money payments were made to Ripple or another XRP seller. Since 2017, Ripple's programmatic sales have been less than 1 % of the worldwide XRP trade volume. Majority of the people who bought XRP on stock exchanges for digital assets do not invest their money in Ripple at all. ”

Richter Torres added: "The records show that Ripple did not make any promises or offers in relation to Programmatic Sales, since Ripple didn't know who bought the XRP and the buyers did not know who sold it." In fact, many programmatic buyers were not aware of Ripple's existence at all. ”

Brad Garlinghouse, CEO von Ripple, had to fear that the summary judgment, "we said in December 2020 that we will be on the right side of the law and will be on the right side of the story. Thank you to everyone who helped us with today's decision-a decision that relates to all crypto innovations in the USA."

It is not surprising that the SEC published an explanation in which the essential elements of the court ruling were ignored. However, SEC chairman Gary Gensler was active on Twitter, but abstained. In the SEC declaration, it was pointed out that the court recognized the use of the Howey test and that Ripple sold XRP token as investment contracts, which under certain circumstances violates the securities laws. The SEC said it would continue to check the decision.

Stuart Alderoty, Chief Legal Office of Ripple, replied to the news: Saying, "A big win today-from a legal point of view-XRP is not a security. From a legal point of view, sales on stock exchanges are not securities. Securities. “

The court ruling is good news for crypto exchanges because the court decided that the programmatic sale of XRP does not justify the third Howey pillar. However, Ripple remains on the hook compared to institutional sales.

There is a risk of an appeal by the SEC, which could delay the case by another two to three years.

The day before us

We assume that the judgments in the SEC case will find Ripple in the course of the day, since experts sharply turn judges Torres upside down. However, investors should also keep an eye on the reactions of the SEC and the US legislator.

While XRP will probably fall back from the highest morning, the threats of the US legislator to hand over the baton to regulate the area of ​​digital assets to the CFTC would be optimistic. An appeal of the SEC would probably lead to XRP a significant part of the profits on Thursday.