Pryor Cashman Partner Jeffrey Alberts, who co-heads the firm's FinTech Group, spoke with Law360, Crowdfund Insider, and Fortune about a Federal Court ruling in the U.S. Securities and Exchange Commission enforcement action against Ripple Labs, creator of the XRP crypto token.
In "Ripple, SEC Claim Victories In Split Ruling On Token's Status," Jeff tells Law360 that the decision, which said that the XRP token was a security when sold directly to investors but was not a security when it traded on public exchanges, a "huge blow to the SEC's ability to regulate digital asset sales."
Jeff expanded on this for Crowdfund Insider, saying:
"The court rejects the SEC's position that people who bought XRP tokens speculatively as investments over digital asset exchanges were engaged in securities transactions, reasoning that these purchasers could not reasonably expect Ripple to act to increase the price of XRP. This is a huge blow to the SEC's ability to regulate digital asset sales," said Alberts. "The court's ruling that sales of XRP on public exchanges were not securities transactions also is a huge blow to the SEC's ability to regulate other entities in the cryptocurrency space, such as exchanges and other platforms that allow users to transmit cryptocurrencies."
Speaking to Fortune, Jeff noted that the underlying question of whether tokens are securities or not "has previously led to widespread confusion."
Read the full articles using the links below (subscription may be required).
Resources
- [Law360] Ripple, SEC Claim Victories In Split Ruling On Token's Status
- [Crowdfund Insider] Legal Experts Comment on Ripple – XRP Ruling: 'A huge blow to the SEC's ability to regulate other entities in the crypto space'
- [Fortune] Experts are calling the Ripple ruling a win for the industry and XRP. Here's how lawyers—and Crypto Twitter—are reacting
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