The New York State Bar Association (NYSBA) comments on the SEC v. Ripple’s ruling on XRP, highlighting its potential implication on the broader crypto industry.
The association provided insight into the summary judgment decision of the Ripple ruling in a “House of Delegates Materials” report.
Although the NYSBA published the report in June, it gained prominence within the XRP community after famous crypto enthusiast WrathofKahneman brought it to attention.
Expert Highlights NYSBA Interpretation of Ripple Verdict
According to WrathofKahneman, the NYSBA interpreted the Ripple summary judgment to imply that XRP is not inherently a security.
The association also sees the verdict as a victory for Ripple and a cognizable path toward helping digital assets avoid securities registration requirements.
Furthermore, the expert mentioned that the NYSBA expressed concerns that the SEC has abandoned security classification as a fact-specific test.
Ripple Decision Could End SEC Securities Claim Against Tokens
The Ripple decision, especially the summary judgment, has continued to trigger reactions among legal experts. Most experts believe the decision could determine how crypto will be regulated.
Interestingly, the NYSBA shares this sentiment, emphasizing that the decision could end the SEC’s token-as-a-security claim. According to the association, Judge Torres rejected this claim by applying the Howey Test to the different forms of Ripple-related transactions to determine whether they violated securities laws.
This analysis distinguished XRP as a subject of an investment contract instead of a security in itself. The NYSBA characterized this finding as a win for the industry. It pointed out that the decision contradicts the SEC’s position that most crypto assets are unregistered securities.
Additionally, the association mentioned that Judge Torres’ dismissal of the SEC’s token-as-a-security claim affirms the sentiment among legal experts, who recommend the individual assessment of each token under the Howey test.
Judge Torres Ruling Weakens SEC Wild West Claims
Furthermore, the association emphasized that Judge Torres’ verdict in the Ripple lawsuit weakened the SEC’s Wild West claim. Gary Gensler, the chair of the SEC, has persistently labeled the crypto market as the Wild West. He believes the market is rife with fraud and manipulation, putting unwary investors at risk.
”It is hard to believe that ‘the vast majority’ of cryptocurrencies are unregistered securities when the first major court case to address the issue concluded that XRP, a major cryptocurrency, was not in and of itself a security,” the NYSBA report added.
Fears of Appeal Heightens
Meanwhile, Judge Torres has issued the final judgment of the decision, ending in a partial victory for the parties. As reported earlier, Judge Torres reduced the SEC’s proposed fine from $2 billion to $125 million. Additionally, she imposed a permanent injunction against Ripple’s future institutional sales.
This mixed ruling triggers speculation that both parties could appeal the verdict. Some believe the parties have established the groundwork for a potential appeal. The Crypto Basic reported that Ripple moved 111% of the fine amount, worth $138.75 million, to a trust, pending the resolution of an appeal or expiration of the appeal notice deadline.
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