Fred Rispoli’s recent apprehension regarding the legal status of XRP has drawn attention to potential regulatory inconsistencies, suggesting that while XRP might be classified as a security in California, it may not be considered as such in New York.
Although Judge Phyllis Hamilton dismissed multiple claims against Ripple in the Zakinov lawsuit, including allegations of violating securities laws, the debate surrounding whether XRP meets the definition of a security remains unresolved.
Renowned legal expert Fred Rispoli has expressed significant concerns about the legal classification of XRP, highlighting the likelihood that the cryptocurrency could be labeled as a security in California but not in New York.
Attorney Rispoli shared his viewpoint following the recent judgment in the Zakinov civil securities lawsuit against Ripple. The lawsuit, accusing Ripple CEO Brad Garlinghouse of breaching securities laws during the 2017 XRP offering, received a summary judgment ruling yesterday.
In her decision, 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. Nevertheless, she concluded that a jury would have to determine whether Ripple’s sale and offering of XRP constituted a security.
Interestingly, Ripple’s legal team urged Judge Hamilton to adopt the reasoning employed by Judge Analisa Torres in the SEC lawsuit. Judge Torres had previously ruled that Ripple’s programmatic sales of XRP on digital exchanges did not meet the criteria to be classified as securities.
Judge Torres found that buyers of XRP through programmatic means did not expect to profit directly from Ripple’s endeavors, addressing one of the aspects of the Howey test utilized to determine if a transaction qualifies as a security.
Contrary to Torres’s rationale, Judge Hamilton did not agree with this interpretation, asserting that the issue should be decided by a jury as a matter of law. This is not the first instance of a U.S. District Judge diverging from Judge Torres’s line of reasoning, as seen in the SEC v. Terra lawsuit last year.
In light of the disagreement with Judge Torres’s logic, Attorney Rispoli stressed the necessity for federal legislation to provide clarity and consistency regarding the regulatory status of cryptocurrencies like XRP across different jurisdictions.
While Ripple secured a victory in the Oakland class action lawsuit, with the judge granting the company’s motion for summary judgment on federal and state law securities claims, Ripple’s Chief Legal Officer, Stuart Alderoty, maintains that Judge Torres’s reasoning remains valid despite the recent developments in the Zakinov case.
Despite these positive legal developments, XRP’s price continues to struggle under the crucial resistance level of $0.50. At the time of writing, XRP is trading at $0.4857, down 1.82%, with a market cap of $27 billion.