• A recent ruling by a US District Judge contested Judge Analisa Torres’ decision in the Ripple case.
• Judge Rakeoff’s 50-page Opinion and Order found the SEC’s arguments plausible, indicating that the TerraUSD (UST) and LUNA sale potentially violated U.S. Securities law.
• The U.S. judge cited the ruling in the Ripple case, expressing strong disagreement, as the Howey Test does not account for distinctions between institutional and retail investors.
Overview of Ripple Case
On July 18, lawyers representing Terraform Labs and its CEO Do Kwon in their SEC lawsuit filed a motion to dismiss, citing Ripple’s partial victory against the financial regulator as the basis for their arguments. Earlier in July, Judge Torres ruled that retail sales of the XRP token did not breach U.S. securities law, and only institutional sales could be considered an offense according to the Howey Test.
Judge Rakeoff’s Decision on SEC v Terraform et al.
Terraform’s motion was met with a swift response from the SEC, urging the court to disregard the rulings in favor of Ripple as they were deemed “wrongly decided”. Judge Rakeoff has now sided with the SEC, and Terraform Labs and Do Kwon will face fraud allegations by commission. In a 50-page Opinion and Order document, Judge Rakeoff stated that the SEC’s arguments presented a plausible claim that sale of TerraUSD (UST) and LUNA violated U.S Securities Law..
Implications for Ripple Case
The U.S judge cited ruling in ripple case expressing strong disagreement as Howey Test does not account for distinction between institutional and retail investors . After this recent ruling there is speculation regarding implications for ripple partial victory against sec .
The Howey Test is an approach used by securities regulators to determine whether transactions qualify as investment contracts under US federal security statutes like Securities Act 1933 (USA). It requires analyzing if transaction involves an investment of money or other assets with reasonable expectation profits from efforts of others i-e promoters or third parties . If all criteria are fulfilled then transaction will be considered as security otherwise it won’t be treated as one .
Judge Rakoff’s recent decision could have significant repercussions for XRP holders across America if it leads to further regulatory scrutiny on crypto investments – particularly those involving unregistered tokens issued through ICOs or other offerings where investors expected profits from their investment due to potential increase in value over time or other similar situations covered by US Security Laws .