- Fred Rispoli’s concern over XRP’s legal status highlights potential regulatory inconsistencies, suggesting it could be deemed a security in California but not in New York.
- Despite Judge Phyllis Hamilton dismissing several claims against Ripple in the Zakinov lawsuit, including allegations of securities law violations, the debate over whether XRP qualifies as a security remains unsettled.
Prominent legal expert Fred Rispoli has raised a significant concern about XRP’s legal status, suggesting the possibility that the coin could be classified as a security in California but not in New York.
Attorney Rispoli shared this perspective in response to the recent ruling in the Zakinov civil securities lawsuit against Ripple. The case, which accused Ripple CEO Brad Garlinghouse of violating securities laws through the 2017 XRP offering, received a summary judgment decision yesterday.
In the ruling, Judge Phyllis Hamilton dismissed four claims against Ripple, including the allegation of the company’s failure to register with the SEC, as reported by Crypto News Flash. However, she ruled that a jury would need to decide whether Ripple’s offering and sale of XRP constituted a security.
Notably, Ripple’s legal team encouraged Judge Hamilton to adopt the rationale used by Judge Analisa Torres in the SEC lawsuit. Furthermore, Judge Torres ruled that Ripple’s programmatic sales of XRP on digital exchanges do not qualify as securities.
Judge Torres determined that programmatic buyers of XRP did not anticipate profits directly from Ripple’s efforts, addressing one of the prongs of the Howey test, which is used to establish whether a transaction is a security.
Judge Hamilton Rejects Torres’s Reasoning
Amid current developments, Judge Hamilton did not adopt this reasoning, stating that the matter was a question of law for the jury to decide. This isn’t the first instance of a U.S. District Judge disagreeing with Judge Torres’ reasoning. Last year, the ruling judge in the SEC v. Terra lawsuit also rejected the logic behind Judge Torres’ verdict.
Attorney Rispoli emphasized the need for federal legislation in light of the latest disagreement with Judge Torres’ logic. He noted that while XRP is considered a non-security in New York, it could be classified as a security in California.
Win for @Ripple in the Oakland class action. Judge grants Ripple’s summary judgment motion on federal class claims for unregistered securities as well as the state law securities claims. But these were procedural wins. 1/4 #xrpholders #xrp
— Fred Rispoli (@freddyriz) June 20, 2024
Federal legislation is crucial to ensure clarity and uniformity regarding the regulatory status of crypto assets, including XRP, across different jurisdictions.
Meanwhile, Ripple’s Chief Legal Officer Stuart Alderoty maintains that Judge Torres’ reasoning remains valid despite the recent ruling in the Zakinov case.
XRP Price Action
Despite these positive developments, Ripple’s native cryptocurrency XRP continues to trade under the crucial resistance of $0.50. At press time, the XRP price is down 1.82% trading at $0.4857 with a market cap of $27 billion.
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