In a recent development, the ruling of Judge Analisa Torres in the SEC v. Ripple case has stirred heated discussions among crypto and legal analysts. The focus of the debate revolves around the true implications of the judge’s statements on the security status of XRP.
David Barrera, the co-founder, and CEO of Enumma, took to Twitter to address the misconceptions surrounding Judge Torres’ ruling. He emphasized that those claiming Judge Torres declared XRP as not being a security are misinterpreting her statement.
Legal Expert Barrera Debunks Misinterpretation Of Judge’s Ruling On XRP
According to Barrera, the crux of the misinterpretation hinges on the word “embodies” used by the judge in her ruling. Barrera posted an excerpt from the ruling where Judge Torres stated that XRP, as a digital token, is not a contract, transaction, or scheme that embodies the requirements of an investment contract under the Howey test.
However, Barrera clarified that the judge did not explicitly rule that “XRP itself is not a security,” nor did she deny that “XRP is not an instrument embodying an interest in the scheme.”
Barrera further revealed that the SEC’s argument did not revolve around XRP being the entire investment scheme. Instead, the SEC contended that the entire circumstances surrounding the offering and sale of XRP constituted the investment contract under the Howey test.
Judge Torres’ ruling only addressed XRP’s status as a specific type of scheme, not encompassing all the requirements of Howey.
The issue of whether XRP or any digital token embodies an interest in the investment contract remained unanswered by Judge Torres’ ruling. Barrera underscored that her ruling solely focused on XRP not meeting the criteria of a particular type of scheme.
Furthermore, Barrera argued that applying cases that interpret the statutory definition of a security to the interpretation of a sale is inappropriate, as the Howey test only pertains to identifying an investment contract, not the sale itself.
Ripple CTO Counters Barrera’s Remark
In response to Barrera’s assertions, Ripple’s CTO David “JoelKatz” Schwartz weighed in, stating that since the legal definition of a sale contains references to security, applying the statutory definition of security becomes crucial in determining a sale’s nature.
To support his argument, Schwartz shared a screenshot illustrating the legal definition of a sale and highlighted all instances of the word “security.” The debate surrounding XRP’s security classification intrigues crypto enthusiasts and legal experts as they await further developments in the SEC v. Ripple case.
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