Ripple, the company behind XRP, faced a US regulator in a lawsuit; the Securities and Exchange Commission (SEC). Recent XRP news reported that the lawsuit has taken a major turn. The judge has ruled in Ripple’s favor for the most part. But how is the SEC reacting to the news?
SEC responds to XRP lawsuit ruling
In a statement to The Block, a spokesperson for the agency said: “We are pleased that the court found that XRP tokens were offered and sold by Ripple as securities in violation of securities laws in certain circumstances.”
While XRP in itself would not be an asset, as the judge ruled, the XRP sales by Ripple to institutional clients were. The SEC was right on this point.
In addition, the SEC is pleased that the Howey test determines whether a cryptocurrency is a security. This test dates back to 1946 and has been used ever since to determine whether a particular transaction is a security (also known as an investment contract).
“The court agreed with the SEC that the Howey test determines the securities analysis of crypto transactions and rejected Ripple’s fabricated test of what constitutes an investment contract,”
In the statement, the body therefore focuses mainly on the successes and not on the significant defeat in other areas. It also states the “decision to continue investigating.” This leaves the door open for appeal. It is therefore very unlikely that the SEC will now throw in the towel.
Read more about what securities are exactly and why they are important for crypto such as XRP and cardano (ADA).
Ripple (XRP) lawyer lashes out
Of course, the SEC’s statement did not go unnoticed by the XRP camp. Stuart Alderoty, chief legal officer at Ripple, called the statement “sad.” He added the following harsh words:
“Take the loss. You have earned it.”
Couldn’t agree more with @katiebiber. Pathetic “statement” coming from the SEC today.
Take the loss. You deserve it. https://t.co/NYajgKjjG1
— Stuart Alderoty (@s_alderoty) July 13, 2023